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A Strong Choice From Vanguard for High-Yield Bond Exposure

Silver-rated Vanguard High-Yield Corporate has a knowledgeable management team, sound long-term track record, and highly attractive price tag.


Sumit Desai: High-yield bonds can play a unique role within a diversified portfolio. The asset class can provide strong income generation if investors maintain a long-term view, avoid trading in and out of the sector, and focus on capital preservation. One of the primary risks for high-yield bonds is deterioration in a company's fundamentals to the point of default, which leads to capital impairment.

For that reason, we think it makes sense for investors to focus on the higher-quality portions of the high-yield bond market.

Sumit Desai, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.