|IG Corporates 1-3 Year||-0.07||0.46||1.34||3.72||2.69|
|Latest||1-YR Low||1-YR High||1-WK Change||YTD Change||1-YR Change|
|Latest||1-YR Low||1-YR High||1-WK Change||YTD Change||1-YR Change|
|Latest||1-WK Change||YTD Change||1-YR Change|
|Crude Oil - WTI ($)||68.44||0.16||19.92||26.20|
|5-Yr Breakeven Inflation Rate (%)||2.58||0.02||0.61||1.01|
All data as of 08/13/2021, unless otherwise noted.
Chart of the Week
Source: Bloomberg Index Services Limited and ICE Data Indices. Data as of 08/11/2021. Spread differential is the difference in spreads between the ICE BofA U.S. High Yield Energy Index and the ICE Bofa U.S. High Yield Constrained Index. The ICE BofA U.S. High Yield Constrained Index tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $250 million. The ICE BofA U.S. High Yield Energy Index is a subset of the ICE BofA U.S. High Yield Index and tracks the performance of the US dollar denominated below investment grade corporate debt publicly issued by energy companies in the US domestic market. Spot crude oil price derived from West Texas Intermediate (WTI) which is a grade of crude oil and refers to the price of the New York Mercantile Exchange WTI Crude Oil futures contract. The historical data shown in the chart above are for illustrative purposes only and do not represent any specific portfolio managed by Lord Abbett or any particular investment. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
Source: Morningstar Direct. Returns are total returns for the following indexes in order shown: Bloomberg Barclays U.S. Aggregate Bond Index, Bloomberg Barclays U.S. Corporate Bond Index, ICE BofA U.S. High Yield Master II Constrained Index, Credit Suisse Leveraged Loan Index, ICE BofA U.S. Corporate 1-3 Year Index, and Bloomberg Barclays Global Aggregate Bond Index.
U.S. Treasury Rates
Source: Bloomberg Index Services Limited. 2 Year = 2-Year U.S. Treasury Index. 5 Year = 5-Year U.S. Treasury Index. 10 Year = 10-Year U.S. Treasury Index. 30 Year = 30-Year U.S. Treasury Index. Treasuries are debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes.
Source: Bloomberg Index Services Limited. The following Credit spreads shown are for Bloomberg Barclays U.S. Aggregate Bond Index subsectors: IG Corporate = Bloomberg Barclays U.S. Aggregate Corporate average OAS, CMBS = Bloomberg Barclays U.S. Aggregate CMBS (commercial mortgage-backed security) average OAS, MBS = Bloomberg Barclays U.S. Aggregate MBS (mortgage-backed security) Fixed Rate average OAS, and ABS = Bloomberg Barclays U.S. Aggregate ABS (asset-backed security) average OAS. EM Aggregate = Bloomberg Barclays Emerging Market USD Aggregate Index. Spread is the percentage difference in current yields of various classes of fixed-income securities versus Treasury bonds or another benchmark bond measure. A bond spread is often expressed as a difference in percentage points or basis points (which equal one-one hundredth of a percentage point). The option-adjusted spread (OAS) is the measurement of the spread of a fixed-income security rate and the risk-free rate of return (typically that of U.S. Treasury securities), which is adjusted to take into account an embedded option. The spread is added to the fixed-income security price to make the risk-free bond price the same as the bond.
Source: Bloomberg Index Services Limited & S&P Dow Jones Indices. The S&P GSCI® is recognized as a leading measure of general price movements and inflation in the world economy. The index representing market beta is world-production weighted. It is designed to be investable by including the most liquid commodity futures, and provides diversification with low correlations to other asset classes. West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. The breakeven inflation rate represents a measure of expected inflation derived from 5-Year U.S. Treasury Constant Maturity Securities and 5-Year Treasury Inflation-Indexed Constant Maturity Securities. The latest value implies what market participants expect inflation to be in the next 5 years, on average.
A bond yield is the amount of return an investor will realize on a bond. Though several types of bond yields can be calculated, nominal yield is the most common. This is calculated by dividing the amount of interest paid by the face value.
Yield-to-maturity is the rate of return anticipated on a bond if held until it matures.
A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.
Basis point is a financial unit of measurement that is 1/100th of 1%.
Mortgage-backed Security (MBS) is a type of asset-backed security which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals that securitizes, or packages, the loans together into a security that investors can buy.
Asset-backed Security (ABS) is a financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. For investors, asset-backed securities are an alternative to investing in corporate debt.
Commercial Mortgage Backed Security (CMBS) is a type of mortgage-backed security that is secured by the loan on a commercial property. A CMBS can provide liquidity to real estate investors and to commercial lenders. As with other types of MBS, the increased use of CMBS can be attributable to the rapid rise in real estate prices over the years.
ICE BofA Index Information:
Source: ICE Data Indices, LLC (“ICE”), used with permission. ICE PERMITS USE OF THE ICE BofA INDICES AND RELATED DATA ON AN "AS IS" BASIS, MAKES NO WARRANTIES REGARDING SAME, DOES NOT GUARANTEE THE SUITABILITY, QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE ICE BofA INDICES OR ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THE USE OF THE FOREGOING, AND DOES NOT SPONSOR, ENDORSE, OR RECOMMEND LORD, ABBETT & CO. LLC., OR ANY OF ITS PRODUCTS OR SERVICES.
Bloomberg Barclays Index Information:
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted.
The historical data are an illustration of commonly used economic indicator indexes and do not depict or predict the performance of any portfolio managed by Lord Abbett or any investment.
All indexes are unmanaged and do not reflect reinvestment of dividends and distributions, deduction of management fees, or operating expenses. An investor cannot invest directly in an index.
A Note about Risk: The value of investments in fixed-income securities will change as interest rates fluctuate. As interest rates fall, the prices of debt securities tend to rise, and as interest rates rise, the prices of debt securities tend to fall. Investments in high-yield securities (sometimes called junk bonds) carry increased risks of price volatility, illiquidity, and the possibility of default in the timely payment of interest and principal. Bonds may also be subject to other types of risk, such as call, credit, liquidity, interest-rate, and general market risks. No investing strategy can overcome all market volatility or guarantee future results.
The opinions in this weekly update are subject to change based on subsequent developments and may not reflect the views of the firm as a whole. The material is not intended to be relied upon as a forecast, research, or investment advice, is not a recommendation or offer to buy or sell any securities or to adopt any investment strategy, and is not intended to predict or depict the performance of any investment. Readers should not assume that investments in companies, securities, sectors, and/or markets described were or will be profitable. Investing involves risk, including possible loss of principal. This document is prepared based on the information Lord Abbett deems reliable; however, Lord Abbett does not warrant the accuracy and completeness of the information. Investors should consult with a financial advisor before making an investment decision.