Leveraged loans delivered one of the strongest gains of the year during October, outperforming the high yield market by 1.45%. The month was marked by heavy CLO issuance, robust primary market activity, and substantial fund and ETF inflows.
A sectoral breakdown reveals that telecommunications was the only positive performer in the high yield market, whereas in the leveraged loan market, only one sector, automotive, posted negative returns.
Despite the disparity in monthly performance between both indices, YTD returns are nearly identical, with the leveraged loan index returning 7.75% vs a 7.78% return for the High Yield Index. Our default rate projections, which are still low, indicate strong support for both asset classes in the coming months.
