Hybrid characteristics provide attractive risk/reward profile.
Key Insights
- High yield bonds, in our view, have a key role as a strategic long‑term investment and a mainstay allocation in a well-diversified portfolio.
- High yield bonds have an attractive risk/reward profile, having historically provided equity‑like returns with less volatility than stocks.
- Investors have been able to recognize much of high yield’s value by maintaining a long‑term allocation and taking advantage of the regular coupon payments.
High yield (HY) bonds, in our view, have a key role as a strategic long‑term investment and a mainstay allocation in a well‑diversified portfolio. Historically, high yield bonds have provided equity‑like returns with less volatility. Investors have been able to recognize much of high yield’s value over time by maintaining a long‑term allocation and taking advantage of the potential compounding effect of regular coupon payments.
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