High-Yield Bonds at a Crossroads
Three high-yield bond managers discuss the current state of the high-yield market and the role high yield should play in an investor's portfolio.
This analyst blog is part of our coverage of the 2016 Morningstar Investment Conference.
2015 was a challenging environment for high-yield bond funds. The high-yield bond Morningstar Category fell 5% last year amid falling commodities prices. Adding to the category's woes was the highly publicized closure of Third Avenue Focused Credit. But the high-yield bond category has staged a bit of a comeback this year, gaining 6% for the year to date. Given this backdrop, investors may wonder, what is the current state of the high-yield market? Is high yield overvalued? How should an individual investor think about using a high-yield fund in his portfolio?
Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.