SECTOR PROFILE
Even though high yield bonds escaped the worst of the chaos last year , the sector could be well placed to ride the fixed income recovery
fall in high yield bonds makes some sort of sense . While supposedly the highest-risk part of the fixed income market , the ICE BofA Sterling High Yield index ’ s losses of 11.1 % were less than half those of the lowest-risk one . Yet even though high yield bonds escaped the worst of the chaos last year , the sector could be well placed to ride the fixed income recovery , according to Rhys Davies , manager of the
Invesco Bond Income Plus Limited trust .
“ I have not seen these current levels of yield , and the level of compensation for this risk , for many years ,” he says , noting yields are double what they were 12 months ago . As an example , the ICE BofA European Currency High Yield index started 2022 with a yield of 3.4 % and ended it at 8 %, its highest level for a decade . In the UK equivalent , the yield went from 5 % to 10.4 %, and currently sits at 9.6 %. “ The market is now doing what
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