economy
Why some investors are turning to high-yield bonds amid the volatility. Where to find opportunity
Rates recently took a leg higher across the fixed income market, but some investors see opportunity in high-yield bonds.
TL;DR
- High-yield bonds are presented as less risky and higher returning than long-dated Treasurys.
- The high-yield market has seen improved quality and larger, more profitable companies.
- Strong corporate earnings and forward guidance support the high-yield market.
- Recent capital investment and economic growth suggest macro-level strength.
- Opportunities exist in shorter durations and specific segments like B-rated bonds.
- High-yield bonds can enhance portfolios, but investors should be selective and aware of their equity-like trading behavior.