Understanding High-Yield Bonds



High-yield bonds, also known as junk bonds, are fixed income instruments that offer higher yields than investment-grade bonds. These bonds are issued by companies with lower credit quality, making them riskier investments.​ While the higher yields can be tempting, investors must carefully consider the risks before adding high-yield bonds to their portfolios.​

Understanding High-Yield Bonds

High-yield bonds are typically issued by companies that have a higher risk of defaulting on their debt obligations.​ These companies may have a lower credit rating or may be in industries that are more vulnerable to market fluctuations.​ Due to the added risk, these bonds offer higher yields to attract investors.​

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