Despite the Gray Mood, Skies Are Only Partly Cloudy

Second Quarter 2022

Here are the key takeaways from our latest High-Yield and Bank Loan Outlook report:

  • While the leveraged credit market delivered one of the worst first quarter performances on record, there are reasons to conclude that conditions are not as dire as they seemingly appear.
  • While caution is warranted, this credit cycle is not yet over and that prudent risk-taking in high-yield and bank loan markets may offer rewards for investors who can look through the gloom.
  • The current environment offers an opportunity to start removing some exposure to issuers that are more exposed to non-U.S. revenues and that have little pricing power to tackle rising costs.
  • For corporate issuers with minimal exposure to Europe, who have the capacity to absorb rising labor or energy costs, and whose balance sheets have manageable leverage, the current period may be supportive of better-than-expected performance.

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Important Notices and Disclosures

This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information.