Tag Archives: S&P U.S. High Yield Corporate Bond Index

Jun 23, 2020

BBB Bond Downgrades Added USD 88 Billion to the High-Yield Bond Market YTD

In recent years, one noticeable development in the corporate bond market has been the rapid growth of the BBB bond market in terms of its absolute amount and relative share of investment-grade corporate bonds. We wrote a blog on this topic in May 2019 detailing the growth of the BBB bond market and its impact…

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Jun 19, 2020

Like the Virus, Credit Spreads Could Be at Risk of a Possible Second Wave

Ever since the Fed released its tsunami of credit, credit markets have rallied the most since the depth of the Global Financial Crisis. Continued central bank actions have driven the already existing trend toward demand for higher-yielding assets, helping companies issue debt with fewer lender safeguards and covenants. With the Fed willing to support the…

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Mar 20, 2020

Some Sectors Are Slippery Slopes as Markets Head Downhill

While ski resorts in the Northern Hemisphere were hampered by a mild end of winter, the downhill we are all experiencing has introduced a level of uncertainty and volatility beyond the slopes. The week of March 9, 2020, will go down in history as a time of unprecedented challenge and change. The spread of the…

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Sep 13, 2019

The Outperformance of the S&P U.S. High Yield Low Volatility Corporate Bond Index since Q4 2018

The S&P U.S. High Yield Low Volatility Corporate Bond Index[1] is designed as a low volatility strategy in the high yield bond universe. The index aims to deliver higher risk-adjusted returns than the underlying broad-based benchmark through mitigating uncompensated credit risk. The back-tested index performance demonstrated the efficacy of the low volatility strategy, with reduced…

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Aug 7, 2019

Defensiveness of the Credit Strength Strategy in U.S. Corporate Bonds

Our fundamental credit strength strategy uses credit ratios to screen out issuers with risky credit profiles and construct corporate bond portfolios with strong credit quality (for a detailed methodology, please see our previous blog). Our research shows that a credit strength strategy can potentially reduce return volatility and improve drawdowns. Our goal in this blog…

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Jul 10, 2019

Using Credit Ratios to Build Defensive Corporate Bond Portfolios

For corporate bond managers, credit analysis is a key step in the investment process, one that lays the foundation for their credit outlook and investment strategies. Credit analysis assesses bond issuers’ creditworthiness and evaluates their ability to make timely interest and principal payments. Credit analysis is critical in helping bond managers assess the state of…

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May 1, 2019

Increasing Share of BBB-Rated Bonds and Changing Credit Fundamentals in the Investment-Grade Corporate Bond Market

Since the 2008/2009 financial crisis, BBB-rated bonds have seen significant growth in the U.S. Today, they constitute more than half of the U.S. investment-grade bond market. The increasing share of BBB-rated bonds has dragged the S&P U.S. Investment Grade Corporate Bond Index average credit rating lower, and is accompanied with higher leverage of BBB-rated bond…

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Jul 9, 2018

Leveraged Loans Over High-Yield Bonds

As of July 5, 2018, the S&P/LSTA U.S. Leveraged Loan 100 Index returned 2% YTD, compared with the S&P U.S. High Yield Corporate Bond Index’s return of -0.29%. In 2018, U.S. high-yield performance has experienced two rather sizeable negative returns—back-to-back declines in February (-1.05%) and March (-0.45%)—followed by a turnaround in April (see Exhibit 1)….

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Mar 28, 2018

Performance Analysis of the S&P High Yield Low Volatility Corporate Bond Index for 2017

The S&P U.S. High Yield Low Volatility Corporate Bond Index (the HYLV index) was launched on Dec. 20, 2016, with the aim of capturing high yield bonds with less credit risk and lower return volatility than the broad investment universe of U.S. high yield bonds. One year after the index launch date, we present a…

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Oct 17, 2017

U.S. Corporate Debt Issuance on Pace for Record Year

U.S. corporations continue to take advantage of the accommodative conditions created by a protracted period of low interest rates and strong market participant demand.  As of Oct. 1, 2017, U.S. investment-grade corporate debt issuance surpassed USD 1 trillion—three weeks ahead of 2016’s pace.  Additionally, the amount of speculative-grade corporate debt issued through the first three…

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