Monthly performance, maturity, yield and duration of the iBoxx ALBI, iBoxx ABF and iBoxx SGD Indices.
As markets recover from the short-term volatility caused by a few high-profile collapses of troubled banks in March, April saw the S&P 500® inch up 1.46%, its second consecutive positive month. The spread of investment grade corporate bonds—represented by the iBoxx $ Corporates—was also relatively unchanged, a mere drop of 2 bps from the end of March, to 167 bps. At the same time, U.S. Treasuries, represented by the iBoxx $ Treasuries, gained 0.56%.
On May 1, the financial health of U.S. regional banks was questioned again, as regulators seized the assets of First Republic Bank—a commercial bank that also offered wealth management services, headquartered in San Francisco—which was then bought by JPMorgan Chase.
This announcement came a day ahead of the Federal Reserve meeting on May 2-3, as market participants anticipated its next move against signs of a slowing economy (at the time of publication, the Fed has announced a quarter-point increase of 25 bps, its 10th consecutive hike).
Capital gains in most local markets were offset by the depreciation of most currencies against the U.S. dollar, keeping the iBoxx Asian Local Bond Index (ALBI) (unhedged in USD) flat in April.
All but one local market posted gains in April, with India and Singapore at the top of the leaderboard, both registering returns of 1.52%. Thailand was the exception, losing 0.55% during the month. Year-to-date, all local markets in the index recorded gains, led by the Philippines (up 4.28%), while China Onshore (up 1.24%) posted the lowest return.
Except for Thailand, all other local markets saw a sea of green across the yield curve, with larger gains toward the longer maturities. The highest returns were concentrated in the 10+ segments, led by Singapore 10+ (up 3.09%) and Malaysia 10+ (up 2.47%).
As of the end of April, the overall index yield declined marginally by 3 bps to 3.92%, while yields for most local markets declined. India remained the highest-yielding bond market in the index, offering 7.20%, while Thailand (2.86%) remained the lowest-yielding market.
