Will 2023 be the First Year with Repeat Negative High Yield Performance?

Tuesday 20 December 2022

Investment Talks

   

Will 2023 be the First Year with Repeat Negative High Yield Performance?

December 2022| In every calendar year following a year of negative US high yield returns, high yield bonds posted positive returns. In this paper, we analyze the seven negative years of high yield bond returns to determine the reason for this positive performance – and consider what this could mean for investor portfolios in 2023.

01 |  In each year immediately following a year with negative performance, the US high yield market has always generated a positive return.

02 | We analyze the potential factors contributing to this phenomenon, including default rate, inflation, the federal funds rate, and the unemployment rate.

03 | While we cannot offer a definitive conclusion, investors may wish to consider this historical performance pattern as they consider allocations to high-yield bonds in 2023.

2023-First Year with Repeat Negative High Yield Performance?

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of December 20, 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

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