Fixed income

High Yield bonds

Discover the benefits of high yield bonds in your fixed income strategy, such as potentially higher returns and a typically low correlation with investment grade bonds. High yield bonds are one of our core expertise and we manage $8bn+ in high yield bonds for investors globally.

wing of plane in the air - fixed income high yield

About our high yield strategies

Our strategies allow us to seek attractive income from a broad range of higher yielding bonds from across the globe to help you meet your investment goals. This may include corporate high yield bonds or subordinated debt securities. Our approach is centred on the belief that fundamental research, both top-down and bottom-up, is the best way to determine future returns and we take a suitable amount of credit risk across different market environments. 

Featured insight

Combine harvester in field

Competing forces in the high yield bond market

Fund manager, Rhys Davies, explores why his fund's exposure to B and lower-rated bonds is at an historic low, citing good yields in higher rated bonds and the risks of lower credit quality bonds.

View here

Transcript

success failure

Sign up to receive more on the Fixed Income topics you’re interested in

Let us know your preferences to receive insights and ideas on the themes and strategies of most interest to you.

Sign up to receive more on the Fixed Income topics you’re interested in
Please make a selection.

When you interact with us, we may collect information about you which constitutes personal data under applicable laws and regulations. Our privacy notice explains how we use and protect your personal data.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Related insights

  • Fixed Income
    Future%20of%20fixed%20income%20investing
    Fixed Income

    The future of fixed income investing; takeaways from our webinar

    By Invesco

    As we enter the final quarter of the year, our experts look back at the ‘year of the bond market’ and share their thoughts on the outlook for Fixed Income assets going forward.

    October 16, 2024
  • Fixed Income
    Invesco%20monthly%20fixed%20income%20update
    Fixed Income

    Monthly fixed income ETF update

    By Paul Syms, Raphael Stern, CFA

    Bond markets rallied in September as the Federal reserve cut rates by 50 basis points for the first time this cycle, responding to mixed economic data and a softening labor market. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.

    October 4, 2024
  • Fixed Income
    Global%20Fixed%20Income%20Strategy%20Monthly%20Report
    Fixed Income

    Global Fixed Income Strategy Monthly Report

    By Invesco

    In our regularly updated macroeconomic analysis we offer an outlook for interest rates and currencies – and look at which fixed income assets are favoured across a range of market environments.

    October 1, 2024
  • Fixed Income
    Fixed Income

    Emerging market local debt | Monthly macro insights

    By Wim Vandenhoeck, Thomas Reynolds

    Catch up on monthly fixed income insights from our emerging market local debt team.

    September 13, 2024
  • Alternatives
    Private%20credit%202024%20investment%20outlook
    Alternatives

    Yields remain attractive and may maintain positive relative value

    By Kevin Egan, Ron Kantowitz, Paul Triggiani

    Significant focus on the uncertainty of the US macroeconomic backdrop and its potential implications on the market remain top of mind for investment opportunities. Against this cautious outlook, we asked the experts from Invesco’s bank loan, direct lending and distressed credit teams to share their views as the third quarter of 2024 wraps up.

    August 26, 2024

FAQs

High yield bonds have a higher credit risk than investment grade bonds because the issuers are considered to have a higher chance of defaulting, or not being able to meet their contracted obligations. For this reason, high yield bonds tend to offer higher yields, to compensate for the higher risk.

Credit risk is the risk that a debtor fails to meet a contracted obligation – either the payment of a coupon or the repayment of principal.

Bonds are rated according to their risk of default by independent credit rating agencies, such as Moody'sStandard & Poor's and Fitch. Bonds with credit ratings below BBB are generally considered to be high yield bonds. Bonds with lower ratings have higher risks associated with them that investors should consider.

Investment grade bonds are typically favoured when economic conditions are declining. However, when there is optimism regarding the economy, demand for high yield bonds usually increases. Amid stronger global growth, higher yielding bonds have generally outperformed lower yielding ones.

Historically, high yield bonds have been more volatile with higher default risk among underlying issuers versus investment grade bonds. The volatility of the high yield bond market is typically similar to the volatility of the stock market, unlike the investment grade bond market, which typically has much lower volatility.

Fundamental research involves analysing data which is expected to impact the price or perceived value of a stock. Some stock fundamentals include the profitability of a business, the cash flow, return on assets, and the level of indebtedness of a company.

  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Debt instruments are exposed to credit risk which is the ability of the borrower to repay the interest and capital on the redemption date.

    Important information

    Data is as at 30/06/2024 and sourced from Invesco unless otherwise stated.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.

    For the most up to date information on our ICVC funds, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the financial reports and the Prospectus, which are available using the contact details shown.

    For more information on our investment trust, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available using the contact details shown.

    EMEA 3748873