Key takeaways
- September has historically been a weak month for high yield
- Equally, yields are attractive and economic fundamentals are supportive
- Artemis’ high-yield strategies are positioned to exploit any seasonal weakness
Historically, September has been a difficult month for high yield. In fact, it has been the weakest month of the year on data reaching back to 1998.
Interestingly, that weakness has been particularly pronounced in years like this, when the US has held midterm elections. Meanwhile, credit spreads are tight
On the other hand, we like the companies whose bonds we own and we like the yields they offer. The broader backdrop, meanwhile, looks healthy. The second-quarter earnings season has been robust. The proportion of companies in the S&P 500 reporting positive surprises on earnings is at its highest since 2021. The manufacturing and services ISM indices are both firmly in expansionary territory.
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