IG bonds have turned negative over the past 9 months while HY has moved higher. This week’s chart looks at the impact of duration as rates rise.

Strong corporate and economic data caused high yield bonds and senior secured loans to rally. High duration portfolios, like the Barclays Aggregate, continued to struggle amid rising rates. High yield bonds generated their strongest quarterly return since Q1 2017.

Credit markets were mixed in September as investors increasingly accepted that rates may remain elevated for an extended period.

Markets were gripped with volatility once again in September. Stubbornly high inflation, hawkish Fed rhetoric and poor earnings results in certain economic bellwether stocks weighed on markets with little reprieve.

Despite some modest weakness in high yield during the second half of September, we believe credit remains on solid footing for the remainder of 2021.

Credit markets were mixed in September, with HY Bonds posting a -1.04% return and Senior Secured Loans returning 0.63%. Interest rates remained relatively rangebound throughout the month and the duration-sensitive Barclays Agg returned -0.05%, its second straight monthly decline.

Leveraged credit rises in September | Fundamentals and technicals balanced for now

Leveraged credit was mixed in October | High-rated credit continues to outperform

Credit indices fell alongside equities in October, while rising interest rates weighed heaviest on the Barclays Agg. Equities and high yield credit declined in a volatile trading month. Senior Secured Loans generally held steady and captured upside to October’s rising rates, which caused the Barclays Agg to trade down.

Credit rallied last month alongside broader markets. High yield rose 2.85% while floating rate senior secured loans gained 1.03%.