NYLI MacKay Short Duration High Income Fund Q1 2025 Commentary

2025-07-07 09:24:00 ET

Market Review

• U.S. High Yield posts positive returns despite March volatility
  • The ICE BofA U.S. High Yield Index declined 1.07% in March, bringing first quarter returns to 0.94%, while the ICE BofA 1-5 YR U.S. HY Cash Pay Index returned 1.04%.
  • Yields and spreads moved in lockstep for most of the year until late February, when concerns of persistent inflation and policy uncertainty on tariffs caused spreads to widen.
  • For the overall market, yields increased 57bps in March and higher by 26bps for the quarter, to end at 7.73%.
• Supply/demand technicals are still supportive of U.S. High Yield
  • U.S. High Yield gross issuance in March came in at $26.6bn, bringing first quarter totals to $68.3bn. Issuance continues to be higher quality, with just 1.7% issuance rated CCC.
  • High yield mutual funds/Exchange Traded Funds posted an inflow of $1.8bn in March and $7.3bn for the quarter.
• Higher quality bonds outperform, all sectors positive for the quarter

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