Market Review and Outlook 4Q21 - Investment Grade and Tax-Exempt Fixed Income
Total returns in the investment grade space are being challenged just like last year, which also saw rates rise and drive returns negative at the inception of the new calendar year. In the tax-exempt space, phenomenal retail demand continued with mutual fund flows for the calendar year topping $101 billion as volatility stayed low.
Market Review and Outlook 4Q21 - Leveraged Finance
In the loan space, merger mania continued to drive issuance, and the confluence of higher inflation and tighter monetary policy drew more retail and institutional investors into floating-rate debt. The high yield market continues to be pulled in different directions. However, we continue to believe that the fundamental backdrop for both asset classes remains supportive.
Hedging Inflation with Bank Loans and High Yield Bonds
Both asset classes offer the potential for enhanced diversification, relatively attractive yields, lower volatility than equities, and attractive risk-adjusted returns.