January’s volatility spilled into February with most major asset classes posting another monthly decline. Continuing concerns over inflation, interest rate volatility and the impending Fed tightening cycle weighed on markets to start the month before focus shifted squarely to geopolitical tensions.

Bonds were tested by a sharp interest rate spike and declined slightly alongside equities over the last two weeks of February but remained positive on the month, returning 0.35%. Loan prices remained firm, as the asset class outperformed bonds, returning 0.59%.

December was a strong month for leveraged credit, with HY Bonds and Senior Secured Loans posting returns of 2.09% and 1.60%, respectively. The duration-sensitive Barclays Agg ended down slightly on the month.

Amidst broad market volatility and record outflows, HY Bonds and Senior Secured Loans fell in December. 10-year Treasury rates fell as investors sought safety in government bonds.

Credit market performance diverged in December. High yield bonds started the month higher on optimism that inflation may be cooling before hawkish Fed rhetoric weighed on the asset class over the latter half of December.

Credit markets were positive in December. After two straight monthly declines, HY bonds posted their best month of the year, up 1.88%, while loans returned 0.64%.

Vaccine-fueled optimism drove credit markets steadily higher throughout December.

Credit markets climbed steadily higher throughout a relatively quiet August, with HY Bonds and Senior Secured Loans returning 0.98% and 1.49%, respectively. Interest rates rose throughout the month following the Fed’s inflation policy shift, sending the duration-sensitive Barclays Agg down -0.81%.

Leveraged credit mixed in August | High-rated credit outperforms

High-duration fixed income, such as the Barclays Agg, performed well in August due to falling 10-year U.S. Treasury yields. Strong corporate earnings and U.S. economic data provided tailwinds for HY Bonds and Senior Secured Loans.