High-Yield Bonds: Analyzing the Risk and Return Tradeoff When Rates are Negative
In a world where some investors pay the government for the privilege of lending it money—and where even fixed income securities with the lowest investment-grade credit ratings yield barely more than 1% per annum—the “hunt for yield” becomes ever more challenging. Using a combination of risk analysis and stress testing, we examine the risk characteristics of corporate bond portfolios, with particular attention on the differences between investment-grade and high-yield securities.
||Christoph V. Schon. CFA, CIPM
Executive Director, Applied Research
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