Why high yield bonds is one asset class to consider for the next correction
High yield bonds can offer a similar return profile to equities, but with 40% less risk. In this short video, Vivek Bommi, Senior Portfolio Manager at Neuberger Berman explains how, and recalls the performance of this asset class through three major market corrections of the last 20 years.
Key points
- During the GFC, high-yield fell 20%, compared to nearly 50% for the S&P500. High yields then gained 60% the next year, while equities took 5 years to return to NAV.
- Values can recover quickly as it becomes apparent the companies will not default.
- Specific opportunities with companies in duress recovering to graduate into the investment grade market.
Comments
Ian Ashman
Sorry is NBI listed on the ASX? Struggling to find via ASX search...
James Marlay
Hi Ian, I've reached out to the company and have the following response: "Neuberger Berman is partnering with Equity Trustees Limited, as responsible entity and issuer, to offer its Global High Yield strategy to Australian investors via a public offer (the “Offer”) and listing on the ASX later this year. The invitation to acquire securities under the Offer will be made through, and subject to, a Product Disclosure Statement (“PDS”), which will be issued by Equity Trustees. The PDS is expected to be available from 3 August 2018, being the date that the PDS is lodged with the Australian Securities and Investments Commission. You should obtain a copy of the PDS and consider its contents carefully before making a decision about whether to acquire or continue to hold any securities under the Offer"