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HYG And U.S. High-Yield Market Outlook: Week Ending May 03, 2019

Published Thu, 09 May 2019 08:42:54 -0400 on Seeking Alpha

By Vladimir Nikulin, CFA
During the last week, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) declined by 0.46% primarily due to monthly dividend payments last week. HYG's underlying portfolio demonstrated neutral performance (0.0%) due to lack of positive news during the last week and less dovish than expected statements made by Fed during its meeting.
Figure 1. Price change of different ETFs in April
HYG (US High-yield bonds)
EMB (EM High-yield bonds
LQD (US Investment-grade bonds)
SPY (S&P 500)
EEM (MSCI Emerging Markets)
+0.5%
-0.2%
+0.1%
+4.1%
+2.3%

Source: Bloomberg Terminal
Both fixed-income and equity assets gained positive returns in April due to accommodative central banks, the expectation of a strong Chinese growth, and the anticipation of a positive outcome of US-China trade talks. However, fixed-income assets (HYG, EMB, LQD) demonstrated poor performance compared to equity assets (SPY, EEM) due to a solid start to the Q1 US earnings season that supported the US equity market. The companies included in the S&P 500 demonstrated strong Q1 earnings that exceeded consensus estimate by 12%. We can consider the result sustainable as almost 80% of the companies included in S&P 500 already reported their Q1 results. The US high-yield bond spread declined from 3.9% to 3.7% in April.
Figure 2. ICE BofAML US High Yield OAS spread

Source: Fred
Figure 3. HYG ETF price dynamics during... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
MFS INTERMEDIATE HIGH INCOME FUND 2.68   0.0 0.00 0.00 9.08
CS HIGH YIELD BOND FUND 2.58   0.0 0.00 0.00 8.87
PIONEER HIGH INCOME TRUST 9.29   0.0 0.00 0.00 8.72
WELLS FARGO ADV INCOME OPP FUND 8.20   0.0 0.00 0.00 8.61
ARES DYNAMIC CREDIT ALLOCATION FUND 15.08   0.0 0.00 0.00 8.56
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND 3.16   0.0 0.00 0.27 8.52
WA HIGH INCOME FUND II 6.76   0.0 0.00 0.00 8.27
BLACKROCK CORPORATE HIGH YIELD FUND VI 10.76   0.0 0.00 0.00 8.01
FIRST TRUST STRATEGIC HIGH INCOME FUND II 12.35   0.0 0.00 0.00 7.77
BLACKROCK DEBT STRATEGIES FUND 10.78   0.0 0.00 0.00 7.63
NEUBERGER BERMAN HIGH YIELD STRATEGIES FUND 12.01   0.0 0.00 0.98 7.45
MASSMUTUAL CORP INV 16.54   0.0 0.00 1.20 7.27
SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF 108.94   0.0 0.00 6.07 5.58

MFS INTERMEDIATE HIGH INCOME FUND - CIF
MFS INTERMEDIATE HIGH INCOME FUND - CIF  


Older articles featuring Mfs Intermediate High Income Fund (CIF):
High Yield Credit Rally Really Rolling
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Coronavirus Roundtable - The Yield Squeeze And Income Opportunities
Watch High Yield Bonds And Leveraged Loans For Distress In Financial Sector: Ed Harrison
Danger Or Opportunity In High-Yield Bonds
Impact Of Oil Collapse On High Yield Bond Market
U.S. High Yield Faces Double Whammy
Weekly Review: High-Yield CEFs - The Benchmark Again Close To Its Highest Price
Weekly Review: High-Yield CEFs - The Sector Returned To Positive Results
Weekly Review: High-Yield CEFs - А Lot Of Volatility In The Last Week Of January

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