The chart below shows returns across asset classes in 2015. Key conclusions:
– The turbulence in high yield was really not a big deal when compared with the performance of other risky assets, including equities
– US stocks down 1% and stocks in core Europe up 7%
– EM equities at the extremes, with Brazil down 13% and Russia up 23%
– USD EM corporate bond returns down modestly
– The best performer in fixed income was…US and European government bonds
For more discussion of the outlook for credit in 2016 see also here.
Source: Torsten Slok, Ph.D., Deutsche Bank Research