Is high yield worth the risk?

Fatima Luis Co-manager, F&C Strategic Bond fund One way of assessing value in high yield is to review the spread per turn of leverage, eg how much spread we are compensated for each turn of leverage. CCC grade bonds. which have a higher level of leverage, are paying under 150 bps per turn of leverage than a BB-rated entity, which is offering on average slightly more than 150bps per turn of leverage. Although investors in CCCs are therefore compensated less, we have not reached the lows of 2005-2007. While CCCs look overextended at the moment, we still believe there is scope f...