High Yield Bonds

High-yield bonds offer the income streams of bonds but with a risk-return profile that’s closer to equities. Strong first-hand research is crucial to performance. Only investors with the resources to assess issuers thoroughly can harness the full potential of this high returning but often volatile asset class.

Reasons to invest

  • High-yield bonds tend to pay higher rates of interest than ‘investment grade’ bonds to reflect a lower credit rating.
  • In a low interest-rate environment, demand for high yield bonds has grown, encouraging new issuers across a range of markets and industries.
  • As well as providing regular income, high-yield bonds can offer strong potential for capital growth – e.g. if their credit rating is upgraded and their prices rise.
  • Low sensitivity to performance of government bonds can make high yield a useful source of diversification in a bond portfolio.
  • Aberdeen’s conducts all its own high-yield research to find those bonds offering attractive value – or that could be re-rated by the market.