Tight Spreads Shouldn't Diminish High Yield's Appeal
Despite tight credit spreads, Artisan Partners Credit Team believes the benign credit backdrop of strong economic momentum and low default activity should create a favorable environment for high yield investors going forward.
While high yield credit spreads are below their long-term averages, historically, tight spreads have not necessarily been a precursor to wider spreads in the future or a warning sign of negative returns to come. Instead, credit spreads are just one of many variables to consider when investing in the asset class. With today's benign credit backdrop of strong economic momentum and low default activity, the Artisan Partners Credit Teams believes high yield credit remains an attractive asset class.