What goes around...

High-yield market


Spreads in the high-yield sector have widened dramatically since mid-March, in line with high grade, and are now back at 2004 levels. In March, high yield underperformed by 2.4% and in April it underperformed by 2.7%, which has been the sharpest downturn since the middle of 2002. “You’re looking at a turn in the credit cycle,” says Chris Garman, high-yield credit strategist at Merrill Lynch. “As of November, we started talking up higher-quality allocations.” Spreads in the high-yield ar