Whitepaper - February 2020

High-Yield Bonds: Analyzing the Risk and Return Tradeoff When Rates are Negative

In a world where some investors pay the government for the privilege of lending it money—and where even fixed income securities with the lowest investment-grade credit ratings yield barely more than 1% per annum—the “hunt for yield” becomes ever more challenging. Using a combination of risk analysis and stress testing, we examine the risk characteristics of corporate bond portfolios, with particular attention on the differences between investment-grade and high-yield securities.


Christoph Schon, CFA, CIPM

Senior Principal, Applied Research