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The United States bond market of the corporate bonds is facing conditions that can be compared to the famous game called “Musical chairs.” As a comparison, it can be seen that the speed of the music is turning more frenetic. Current year this market of corporate bonds is defined by the clear shift away of the market from the quality bonds to a lower-rated or commonly known as the C-rated bonds, which are outperforming the bonds from those companies that have healthier balance sheets.

Such a scenario is being driven by the prospects that the US’s economy would continue to flourish and expand. But with the rise in the rated done by the United States Federal Reserve, those depositors who invested in a lot of lower quality investments can now be seen in clearly vulnerable position to the change in this market cycle.

The investment grade of a company that is rated as triple B lower and upper, lost exactly 3.1 % in the current year throughout to the June end, as per the ICEB of AML indices. On the other hand, those bonds rated at the level of double B+ and less have managed to give a good response of 0.1%

The difference is even clearer in the triple C-rated financial instruments of debt, which makes up to just 12% of the entire market value of high-yielding instruments. The triple C-, triple C, and the triple C+ bonds are outperforming the entire market with a wide margin in its first half and posting the whole return 3.9 %, as per the ICE B of AML indices.

A part of such outperformance is because of the demand and supply. The investors of such instruments had predicted an extremely sharper drop in the forth-coming supply of the investment grade bonds.