High Yield Bonds And Stocks: A Perfect Fit?

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Looking for a tactical way to de-risk your portfolio? You might consider rotating a portion of your equity allocation into high yield bonds. Yes, you read that right. It may take a minute to process, since buying high yield is usually thought of as a way to add risk. And with risk assets—notably stocks and high yield—bearing the brunt of the recent market sell-off, adding risk is the last thing many investors want to do right now. Here’s what you may not realize: when combined with stocks, high yield can reduce overall risk without sacrificing much return. In fact, high yield and equities together can actually boost risk-adjusted return potential (Display…

a test case for de-risking with high yield bonds



High yield bonds and equities: effective compliments. A combination of high yield and equities has historically provided better risk-adjusted returns