NFE - Aristotle Corporate Credit Q4 2024 Commentary

2025-02-28 06:00:00 ET

Summary

• U.S. corporate credit markets delivered mixed performance in the fourth quarter, as the U.S. yields rose while corporate credit spreads tightened modestly.
• Corporate credit spreads continued to narrow during the quarter, with both high yield and investment grade spreads approaching levels not seen in over a decade.
• The Aristotle High Yield Bond Composite returned 0.11% gross of fees in the fourth quarter, outperforming the -0.18% return of the ICE BofA BB-B U.S. Cash Pay High Yield Constrained Index.
• The Aristotle Short Duration High Yield Bond Composite returned 0.68% pure gross of fees in the fourth quarter, underperforming the 0.82% return of the ICE BofA 1-3 Year BB-B U.S.

Summary

U.S. corporate credit markets delivered mixed performance in the fourth quarter, as the U.S. yields rose while corporate credit spreads tightened modestly. After a strong third quarter, the Bloomberg U.S. Aggregate Bond Index returned -3.06% during the quarter and finished 2024 with a total return of 1.25%. Similarly, after a strong third quarter, investment grade corporate bonds underperformed both high yield bonds and bank loans, as the Bloomberg U.S. Corporate Bond Index returned -3.04% for the quarter and 2.13% for the year. The Bloomberg U.S. Corporate High Yield Bond Index ended the quarter marginally higher, with a total return of 0.17% for the quarter and 8.19% for the full year. Bank loans posted strong gains, with the Credit Suisse Leveraged Loan Index gaining 2.29% for the quarter and 9.05% for the year....

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