Investment grade v high yield: Which offers best value?

Tatjana Greil Castro, fixed income portfolio manager at Muzinich & Co, examines which asset class is most attractive in the current market.

With spreads on investment grade bonds wide of their usual margins, it is unsurprising that investors are questioning whether investment grade presents better value than high yield. But does it? At the outset it is worth making the general point that investors wanting a balanced portfolio should consider an allocation to both – investment grade offers ballast and stability during bouts of volatility; high yield can provide fuel in the tank when markets rally.  Spreads The spread indicates the premium paid for investing in a risk asset. While they may have tightened for US high yi...