U.S. Junk Bond Rally Will Be More Muted in 2020 After 13.5% Year
- Returns will fall to single-digits; risk premiums set to rise
- Issuance to hold steady or edge lower, driven by refinancings
Photographer: Michael Nagle/Bloomberg
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U.S. junk bonds won’t provide the stellar returns that investors enjoyed this year, but they’re still on track to do reasonably well in 2020 as long as defaults remain muted and the economy stays steady.
Wall Street credit analysts are forecasting gains of between 1% and 7.5%, which would be a sharp decline from the more than 13.5% total returns so far in 2019, according to Bloomberg Barclays index data.