The high yield market continued its rally this week alongside with equities and oil ahead of the OPEC meeting this weekend. The yield to worst on the Bank of America High-Yield Index (BAML) tightened 49bps, falling below 8% to 7.93%, while the spread closed at +662bps, tightening 41bps over the week.  This was the first time we have seen the yield with a 7-handle since mid-November, as the risk-on trade was in full swing over the course of the week, with the high yield index returning 1.6%. This now puts the index at a 5.4% return YTD.

High yield mutual and exchange traded funds reported an inflow of $85mm for the week ending April 13^th, down significantly from the billion plus inflows that we have seen in recent week.  We have only seen one negative reading in the last nine weeks as money is decidedly flowing into the high yield market with over $14 billion coming in over that period. We saw $4.6bil in new issues this week, less than half of the five-month high we saw last week for $10.9bil, but still above the weekly average we have seen of $3.4b so far this year.

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. BAML HY represents the index yield for the designated date, while return/change represent the index return for the period ending date. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.