Research report

Giving credit its due

Why high yield bonds deserve a strategic allocation in most portfolios

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November 6, 2019 | 2 minute read

Corporate high yield bonds have come a long way from their “junk” status in the 1980s. What was once viewed as a risky market made up of formerly investment grade issuers fallen on hard times has evolved into an attractive, competitive place to raise capital. In 1986, the corporate high yield market was $58.6 billion in size.¹ Today, that market has grown to $1.2 trillion.²

We are not going to deny that, as an asset class, high yield bonds are inherently riskier than their investment grade counterparts. Instead of contrasting them, however, we think it is beneficial to examine how these asset classes work together in the context of a well-diversified portfolio.

Download this report to learn the three reasons why we believe high yield bonds deserve a long-term strategic allocation in most portfolios.

  • Bloomberg, as of September 30, 1986.

  • Bloomberg, as of September 30, 2019.

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Robert Hoffman, CFA

Managing Director, Credit Wealth Solutions

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