The market dynamic has been a boon for companies eager to raise liquidity and push out maturities during the Covid-19 outbreak. Indeed, companies at the lowest ends of the credit spectrum have been flocking with debt offerings this year to a welcoming market. their favorite asset class. High-yield issuance has totaled $238 billion so far, up 48% from the same period in 2019. That’s the lowest-ever for a U.S. junk bond with a maturity of five years or longer, according to data compiled by Bloomberg. This chart plots the returns of key indices used by the industry to assess the performance of equities, "You're allowing companies to be able to enter the market and raise money, and that's crucial.". Custodial Receipts (TD Bank), Custodial Receipts, Series 2020-17 -- Moody's assigns enhanced Aa1 to Custodial Receipts (TD Bank), Custodial Receipts Series 2020-17 Moodys 23h U.S. Treasury Bonds Brismo © 2020 CNBC LLC. The two often have moved in tandem, as strength in the riskiest companies has indicated that the overall state of the equity market is strong. High yield corporate bonds have outperformed UK equities and investment grade bonds over the last 20 years both in terms of returns and price volatility. One reason has been a significant policy boost from the Federal Reserve. Willis Towers Watson, Global Pension Assets Study 2019, +44 20 3927 2790 Past performance is not a reliable indicator of future performance. Data is a real-time snapshot *Data is delayed at least 15 minutes. among pension funds. Source: They closed Friday at 5.31%. Data as of 15 Jan 2020. Cases have spiked in multiple hotspots across the country, unemployment remains high, and this week's report on second-quarter GDP is likely to show a nearly unfathomable annualized decline of close to 35% for the April-to-June period. Source: Bloomberg and ICE Data Services. It originally sought to borrow $1 billion but was able to boost the size of the deal by $300 million, the person said. Ball Corp. sold $1.3 billion of junk bonds at record-low yields amid a rally triggered by the Federal Reserve’s historic support for the market and heavy inflows into funds that buy the risky debt. With strong historical returns and low default loss rates, bonds have become increasingly sought-after WiseAlpha Technologies Limited is a company registered in England, with its registered office at Level 39, Not including refinancing, issuance is $101.4 billion, an 81% surge. stack up to the returns available from lending via P2P sites? All Rights Reserved. One key factor boosting both has been support from the Federal Reserve. Investors familiar with P2P but new to corporate bonds often ask - how do the returns "We view HY as a virtual leading indicator, and its relative resilience bodes well for further equity gains.". High-yield issuance has totaled $238 billion so far, up 48% from the same period in 2019, according to J.P. Morgan Chase. The S&P 500 is about flat year to date, but up 44% from its March crisis lows; the iShares iBoxx High Yield Corproate Bond ETF is down 3% for the year and up 23% from the March nadir, but has followed a similar trajectory.