3 Questions to Ask Before Buying High Yield Bonds

High yields can offer sustainable returns, but only if you do your homework

Annalisa Esposito 25 February, 2020 | 9:30AM

bonds

High yield bonds have often been tainted by their reputation as "junk bonds". They are so-called because the companies issuing these bonds are often deemed to be more likely to default on their debt. But some fund managers insist that these bonds deserve a place in investors' portfolios, particularly for those keen to up their income.

“The term 'junk' is unfair,” says Donald Phillips, manager of the Liontrust High Yield Bond fund. “There are many opportunities for investors to find high quality options in the high yield markets,” he says.

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About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk

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