The high-yield market saw a good broad based rally last week as new money continued to be allocated to the asset class and shorts looked to cover as market sentiment turned positive. Higher quality energy names outperformed over the week after being beaten up for the past 18 months, while abandoned credits struggled as investors continue to be inclined away from the riskiest names in the market. We began to see a shift in flows two weeks ago with Lipper reporting a modest inflow into high yield mutual and exchange traded funds of $66 billion, and we picked up momentum over the past week as investors poured $2.7 billion into the asset class, the largest one week inflow in 18 weeks. This morning we’re opening unchanged to slightly higher as commodities continue their positive momentum and US equity futures edge higher. The yield and spread on the Bank of America High Yield index are opening the week at 9.16% and +780bps, 40bps and 43 bps lower that last Monday’s opening levels.

The Bank of America Merrill Lynch High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.