High-yield exposure dominates Other Bonds

Diverse sector is led by pure high-yield offerings over three years, based on the strong macroeconomic background and falling default rates

Funds with high-yield exposure over the past three years have led the UK Other Bond sector as global economies have continued to recover and default rates have improved. However, commentators are keen to highlight the variety of funds in the sector and the differences in their holdings, which makes it difficult to compare them in performance terms. By definition, funds in the UK Other Bond sector must invest at least 20% of their assets in sub-investment grade bonds. In reality, however, the sector contains a mixture of pure high-yield, strategic-bond and income-bond vehicles, and an asso...