Why BBB can be betterthan CCC

Malcolm Jones, head of fixed interest investment at Aegon Asset Management, argues that the European High Yield market is very different from its US equivalent and investors need to draw different conclusions

There are some common misperceptions that exist with the high-yield asset class. By high yield, I am talking about sub-investment grade bonds or 'junk' bonds as the press likes to talk about them sometimes. High yield, sub-investment grade and junk are pretty interchangeable terms. In particular I am going to discuss: • Some of the assumptions being made about the market • Yields and returns • The size and the diversity of the market Then I'll discuss the part of the corporate bond market that could be of interest to the investor looking for higher-yielding bonds that offer attr...