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Weekly Market Summary
Sep 8 to Sep 12, 2025
Extra Credit*
- Passive investing can be effective, especially in liquid, higher-quality, and homogeneous parts of the bond market. Yet, limitations of index coverage and real-world distortions make it hard to index major parts of the global bond market. One cause of the bond market’s inefficiency is the fact that most bonds are owned by a relatively small number of large investors, which can result in a limited buyers and sellers willing to transact. In turn, this small number of bond investors means relatively little trading outside of the largest, most liquid bonds.
- The complexity of the bond market is another feature that active managers can exploit to add value. Indeed, the range of bonds and combinations of features are great. Even bonds from the same issuers may have distinguishing features, including differences in maturity, coupon, seniority, optionality, and covenants.
- It isn’t just that lingering inefficiencies and the complexities of the bond market provide opportunities for skilled active managers. It is also the case that passively replicating isn’t always a good idea. In fact, in bond investing, meaningful market distortions have happened across all its major sectors, including government, corporate, and securitized debt. So, indexing during those times may mean moving in the opposite direction of the overall market.
As of 9/10/25.
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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