Tight spreads don't tell the whole story. The most compelling opportunities in US credit right now may be hiding in plain sight.

Anne Greenwood, Institutional Portfolio Manager on RBC GAM's BlueBay U.S. Fixed Income team, breaks down why the U.S. high yield market's quiet quality transformation is creating real opportunity for active managers - just as the AI trade begins to test investor appetite.

• The AI tailwind in corporate bonds may be waning, and that changes the question investors need to be asking.
• BB-rated bonds now make up roughly half the US high yield index, up from a third pre-2010, while the riskiest borrowing has migrated to leveraged loans and private credit.
• High yield spreads at ~270bps look tight versus a 500bps+ historical average, but index-level data masks significant dispersion - and that's exactly where active managers can add value.