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Weekly Market Summary

Jun 26 to Jun 30, 2023

View Current Performance

Extra Credit*

  • U.S. investment-grade credit metrics improved in the first quarter of 2023 after five quarters of deterioration. Profit margins and quick ratios improved the most, even for BBBs and cyclicals. Interest coverage is deteriorating as coupons increase but is still above the five-year average. And company expectations for both new orders and capex are improving.
  • Active high-yield bonds funds have marginally outperformed passive high-yield bond funds, as actively managed funds year-to-date has returned 4.15% vs. 4.14% for passive (as of June 26, 2023).
  • For investors looking for yield from non-investment-grade corporate debt, 41% of high-yield bond funds now have a yield above 8% vs. 94% of bank-loan funds for their corresponding institutional share class.
  • The trailing 12-month default rates for high-yield bonds and bank loans, excluding distressed exchanges, finished the month at 2.41% and 1.49%, respectively, up from 2.37% and 1.42% from April.

Sources: Bloomberg and JP Morgan as of 6/27/23.

Yield as of:
Jun 30, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
8.50%
10.94%
5.40%
Prior Week
9.03%
11.03%
5.37%
Start of the Year
8.96%
10.69%
5.34%
Option Adjusted Spread as of:
Jun 30, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
390 bps
539 bps
114 bps
Prior Week
426 bps
551 bps
122 bps
Start of the Year
469 bps
592 bps
121 bps
Prices as of:
Jun 30, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
$88.97
$93.55
$90.93
Prior Week
$88.30
$93.18
$90.89
Start of the Year
$86.22
$91.89
$89.37

*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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