Aim higher with
high yield

In a yield-starved world, investors are seeking returns that can potentially give a lift to their fixed income portfolios.

Aim higher with
high yield

In a yield-starved world, investors are seeking returns that can potentially give a lift to their fixed income portfolios.

Converting risk into reward

Low rates mean investors are looking for extra income but worries about potential defaults mean investors can be wary of investing in high yield corporate bonds. We have a different view. We recognise that some issuers will be unable to meet their repayments to bondholders but high yield bonds as an asset class have historically delivered attractive total returns over the long term.

Past performance is not a guide to future performance.

The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

Total return versus volatility, 2000 to 2020

Source: Refinitiv Datastream, total return indices in US dollars, 31 December 2000 to 31 December 2020. Volatility is annualised standard deviation using monthly data returns.

A role for high yield

For investors prepared to accept some risk we believe that through a selective approach high yield bonds can play a valuable role within a diversified portfolio by offering:

Income potential

High yield bonds offer an attractive source of income with yields often multiples of other fixed income assets.

Over the last 10 years Global High Yield has averaged:

last 10 years Global High Yield has averaged
YIELD ON GLOBAL
INVESTMENT GRADE
CORPORATE BONDS
YIELD ON GLOBAL
GOVERNMENT
BONDS

Diversification

High yield bonds typically have a much lower correlation with government bonds, making them a useful diversifier within a fixed income portfolio.

Correlation of Global Government Bonds over last 20 years:

Correlation of Global Government Bonds over last 20 years
WITH GLOBAL
HIGH YIELD BONDS
WITH GLOBAL
INVESTMENT GRADE
CORPORATE BONDS

Yields may vary and are not guaranteed.

Low duration

High yield bonds have relatively low duration (interest rate sensitivity), which can help cushion against inflation concerns.

Source for average yield and duration: Bloomberg, data at 31 December 2020, ICE BofA bond indices, effective yield, effective duration; source for correlation: Refinitiv Datastream, same indices, correlation of monthly total returns, USD, over 20 years to 31 December 2020.

Past performance is not a guide to future performance.

Duration of fixed income asset classes at 31 December 2020:

Correlation of Global Government Bonds over last 20 years
years
years
years
GLOBAL HIGH
YIELD BONDS
GLOBAL INVESTMENT
GRADE CORPORATE
BONDS
GLOBAL
GOVERNMENT
BONDS
Correlation of Global Government Bonds over last 20 years
years
GLOBAL HIGH
YIELD BONDS
Correlation of Global Government Bonds over last 20 years
years
GLOBAL INVESTMENT
GRADE CORPORATE
BONDS
Correlation of Global Government Bonds over last 20 years
years
GLOBAL
GOVERNMENT
BONDS
Case_for_animated_PDF_thumbnail_V2

The case for high yield bonds

Interested in knowing more about high yield? A deeper exploration of the asset class can be found here.

Why Janus Henderson for high yield?

We have a distinct approach to managing high yield bonds:

JHI-Bulb-icon

Repeatable, active management

that blends higher return opportunities with core stable income, adjusting the portfolio’s sensitivity to market and security risks according to the economic and credit cycle.

JHI-Mag_glass-Icon

Research driven team with co-ownership of risk

between analysts and portfolio managers to maximise idea generation; analysts cover issuers across the full credit spectrum (both HY and IG) and capital structure and are ESG focused.

JHI-Multi-Icon

Globally aligned team

working from both the UK and the US ensures an unbiased approach to regional allocation and helps identify opportunities regardless of issuer domicile.

JHI-Umbrella-Icon

Robust risk management

focused on taking the right amount of risk throughout the cycle, together with a unique semi-mechanical stop-loss process.

Explore our funds

Meet the managers

Our high yield portfolio managers located in London and Denver form part of our globally-integrated corporate credit team.

Tom_Ross

Tom Ross, CFA
Portfolio Manager

  • Industry since 2002
  • Joined firm in 2002
  • Based in London
Seth_Meyer

Seth Meyer, CFA
Portfolio Manager

  • Industry since 1998
  • Joined firm in 2004
  • Based in Denver
Tim_Winstone

Tim Winstone, CFA
Portfolio Manager

  • Industry since 2003
  • Joined firm in 2015
  • Based in London
Brent_Olson

Brent Olson
Portfolio Manager | Credit Analyst

  • Industry since 1997
  • Joined firm in 2017
  • Based in Denver

ENGAGE WITH US

For contact details and our sales representatives please click here.

Pursue_fixed_income

PURSUE FIXED INCOME

In uncertain times, fixed income can provide stability. We seek to help you overcome uncertainty with flexible solutions designed to strengthen the core of your portfolio.