Aperture Short Duration High Yield Fund: Commentary for Q3 2023

Quarter in Review

Short duration HY bonds experienced positive returns through July and August before selling off in September with most risk markets. Credit markets were able to withstand the initial moves higher in mainly US Treasury yields but finally succumbed when that move became more intense as 10yr yields rocketed in September.

Credit, however, held up relatively well as investors took the positives from the stronger than expected macro numbers, believing that they reduced future default risk. At the front end of the curve, the key focus remained on refinancing risk. Year to date, investors have been surprisingly supportive of names with short-dated maturities, which has helped performance.

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