To be sure, it was risk-off in December, with increasing signals of instability creeping into the political and economic scenarios (and with a less-bullish picture emerging, as far as rate hikes are concerned). The rout was most pronounced in equities (down 9.03%) and in U.S. leveraged loans (a 2.5% loss, which is unusually large for the asset class), with high yield bonds sliding a not insignificant 2.19%.
Predictably, higher-quality assets fared better, with 10-Year Treasurys gaining 3% and investment-grade corporate bonds returning 1.5%.
For the full-year 2018, U.S. leveraged loans outperformed the other asset classes tracked for this analysis, even with a dismal 4Q showing. The 0.44% return was the only asset class in the black for the year, with only Treasurys coming close (negative 0.03%).
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