A slower pace of growth and easier monetary policy has resulted in investor preference for fixed rather than floating rate assets, as evidenced by fund outflows from bank loan funds and fund inflows into high yield bond funds (Exhibit 1). Investor demand alongside policy support has helped US high yield deliver a robust positive total return in excess of 12% year-to-date. However, concerns around downside growth risks—including trade protectionism and policy uncertainty—has resulted in outperformance of higher quality portions of the high yield market (Exhibit 2).