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Weekly Market Summary
Aug 25 to Aug 29, 2025
Extra Credit*
- Assets at leveraged-loan funds grew by $1.1 billion in July, with modest gains across mutual funds, ETFs, and closed-end funds, according to Morningstar data. The funds added a cumulative $5.1 billion in May through July. Loan funds collectively account for 8% of the $1.5 trillion Morningstar LSTA US Leveraged Loan Index. By comparison, CLOs—the primary investor in leveraged loans—hold roughly 70%.
- Emerging-market bond funds are taking the lead in 2025, extending a run of strong gains over the past two years. Funds in the category have averaged an 8.2% return year-to-date, double the 4.3% average posted by intermediate core bond funds (the largest bond category). Emerging-market bond funds hold U.S.-dollar-denominated bonds from emerging-market countries. Most of these funds primarily hold government bonds, also called sovereign bonds, but emerging-market corporate bonds are often found in their portfolios.
- Emerging-market bonds provide an element of diversification even compared with other bonds, as their defaults typically don’t correlate with the U.S. business cycle because they’re driven by factors unique to their countries of origin.
As of 8/25/25.
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle Fund holdings can be found on the fund pages linked above.
Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.
Investing involves risk. Principal loss is possible.
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