Investors are often told they face a difficult trade-off when searching for income. Stay in higher-quality bonds and accept lower yields. Move further into high yield and take on significantly more risk. We believe that choice is often overstated.
Looking for income? Explore credit’s underappreciated middle ground with us.
Around the boundary between investment grade and high yield sits a part of the bond market that has historically offered an attractive balance between risk and reward. BBB-rated bonds, the lower end of investment grade, and BB-rated bonds, the higher-quality end of high yield, occupy what we see as the ‘sweet spot’ of global credit. Historically, this segment has delivered returns closer to high yield, while exhibiting risk characteristics that have been closer to investment grade.
For income-seeking investors, that combination is compelling.
The challenge is knowing where to look. That means moving beyond traditional benchmarks, individual regions and the assumption that all high-yield bonds carry the same risks. At Aberdeen, that’s exactly what we seek to do. Here’s how.
Search Panacea’s library of insight, technical commentary and adviser resources to quickly find guidance on client and regulatory questions.