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Weekly Market Summary

June 10 to June 14, 2024

View Current Performance

Extra Credit*

  • The Federal Reserve’s flow-of-funds data show foreign investors, mutual funds, and banks stepped up in the first quarter of this year, while household demand turned negative. Through 1Q24, foreign investors were the largest buyer of U.S. fixed income, scooping up nearly $1 trillion, of which a little more than $500 billion was in U.S. Treasuries.
  • The foreign sector was the single largest source of demand as it overtook the household sector from the prior quarter. Foreign demand has risen steadily in recent quarters to $319 billion in 1Q24 vs. $216 billion in 4Q23.
  • Overseas investors, mutual funds, and pension funds/insurance companies were net buyers, accounting for most of the demand (excluding the Fed), and around half of their purchases were in U.S. Treasuries. Demand from mutual funds picked up, with funds purchasing about $445 billion and with corporate bonds and agencies posting the biggest increase, while Treasuries purchases held steady at around $100 billion.
  • Before accounting for the Fed, net supply of fixed-income securities (excluding Treasury bills) fell from about $2.9 trillion to $1.9 trillion through 1Q24. The decline was driven by a drop in net issuance of agencies, which fell about $1 trillion, reflecting swings in home-loan issuance related to advances to the banking sector.
  • Bank-loan and high-yield bond default rates, excluding distressed exchanges, finished the month both at 1.25%, respectively. This was compared to 1.32% and 1.55% from April, as the high yield default rate were 30 basis points lower and the loan default rate now sit at a 16-month low. The long-term historical default rate for loans and high yield bonds was 3.0% and 3.4%, respectively.

Sources: Bloomberg and JP Morgan as of 6/10/24.

Yield as of:
June 10, 2024
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year
Option Adjusted Spread as of:
June 10, 2024
High-Yield Bonds
Investment-Grade Corporates
Last Week
320 bps
476 bps
87 bps
Prior Week
303 bps
470 bps
83 bps
Start of the Year
323 bps
501 bps
93 bps
Prices as of:
June 10, 2024
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year

*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.

Foreside Financial Services, LLC, distributor.

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