Leveraged loans outperform junk bonds, marking the largest lead since 2023

According to the Morningstar LSTA Index, as of this Thursday, the total return of the US leveraged loan market in March was 0.64%. In comparison, a Bloomberg gauge showed that high-yield bonds (junk bonds) lost 1.49%. Data shows that the last time such a large gap appeared was in September 2023, when loans outperformed junk bonds by 2.145 percentage points. In terms of year-to-date performance, loans have also proven more resilient: leveraged loans fell 0.45%, while junk bonds dropped 0.81%.