US High Yield Posts 9% Returns

It’s been a very good year for U.S. high yield. In fact, BondBloxx Investment Management has noted that riskier fixed income assets have outperformed U.S. Treasuries.

As noted in the fixed income manager’s monthly update, a historic bond rally in November pushed the total return for so-called junk bonds to 9.4% year to date. This is significantly above both the U.S. Aggregate Index (1.6%) and the Treasury Index (0.7%).

US Fixed Income Sectors Total Return

Source: Bondbloxx via ICE Data Services, JP Morgan, Bloomberg | Data as of 11/30/2023

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The boost in high yield is part-and-parcel with the bond rally that occurred last month.

“Market sentiment improved dramatically,” according to BondBloxx, “reflecting the Federal Reserve’s decision to pause on further rate hikes.” The boost was also partially driven by “the most recent CPI print showing moderating inflation and a slowing labor market.”