Avoid volatility and keep your yields high

Mia Kwok

Livewire Markets

Throughout COVID-19 there was a dearth of dividend payouts, compounded with a low-interest rate environment that has been devastating to those who rely on regular payment for income. However, there is a segment of the investment universe which has thrived, and that is the corporate high-yield debt market.

"With COVID-19, we have discovered that companies may have to stop their dividend, and a very high portion of income for people coming from dividend has been a bit more volatile.

"Whereas in high-yield, it's a contractual obligation from the corporate to pay their coupon like on any debt, so I think it's actually very important at the moment to consider that," said head of corporate high yield for Perpetual Investments Anne Moal.

As business confidence rebounds, there are more and more investors seeking out corporate debt as a means for regular income from their investments, as well as a diversified exposure to a range of sectors and risks. Watch the video below to discover more of the opportunities and risk in the high yield debt market.

Make sense of the fixed income landscape

The Perpetual Credit Income Trust (ASX:PCI) employs an investment style that seeks opportunities within the broadest possible universe, providing diversification while at the same time managing risk during any point in a market cycle. Offering monthly cash distributions and targeting a total return of RBA Cash + 3.25% (net of fees), learn more here

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Livewire Markets

Mia Kwok is a former content editor at Livewire Markets. Mia has extensive experience in media and communications for business, financial services and policy. Mia has written for and edited several business and finance publications, such as...

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