What are High Yield bonds?

High yield bonds are investment instruments issued by countries or companies deemed by external rating agencies as being at a higher risk of defaulting on the loan. In order to compensate for this greater risk, these bonds tend to offer higher rates of interest than bonds with a better rating.

Why consider High Yield bonds?

The sector is one of the highest yielding sectors of the fixed income universe, and has the potential to offer risk-aware investors an attractive source of income.

Our approach to High Yield

Illustrated by the graphic below, we believe the key to superior, long-term returns in the corporate credit market is our focus on compounding current income and avoiding principal loss through fundamental credit analysis that focuses on bonds of companies that we consider as having improving credit trends.

Historical US High Yield market average annualised return (1987 - 2016) based on BofA Merrill Lynch US High Yield

Price return: 0.02%; Income return: 9.34%; Total return: 9.36%

 


TEXT - INVESTMENT STRATEGIES - FIXED INCOME - HIGH YIELD – Disclaimer , Source as at 12/31/2016. For illustrative purposes only….

Source: AXA IM, Inc. / BofA Merrill Lynch as at 12/31/2016. *BofA Merrill Lynch US High Yield Index
For illustrative purposes only. Past performance is not indicative of future results.
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