Fixed Income Chart

High-Yield Investors Should Look Beyond US Corporates

26 February 2020

1 min read

Historically, Global High Yield Has Outperformed US High Yield

Historically, Global High Yield Has Outperformed US Hugh Yield

Through December 31, 2019
Past performance and current analysis do not guarantee future results.
Global High Yield is represented by the Bloomberg Barclays Global High Yield Index (USD Hedged); US High Yield is represented but he Bloomberg Barclays US Corporate High Yield Index.
Source: Morningstar Direct and AllianceBernstein (AB)

It’s tempting to focus on US corporate bonds in a high-yield strategy. After all, the US accounts for the lion’s share of debt in the global high-yield market.

But investors who have pursued a US-only approach to high yield have missed out. History shows that the global corporate high-yield universe has delivered bigger returns than US high yield 69% of the time over the last 20 years. The average difference? Seventy basis points.

While it’s always a good time to go global in high-income investing, a late-cycle environment is a particularly good time to diversify across the world’s credit markets. After all, not every region, country or industry is at the same stage of the credit cycle.

So instead of reaching for yield by ramping up investment in CCC-rated debt, consider the benefits of diversifying globally. History is on your side.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to revision over time.

This is a marketing communication. This information is provided by AllianceBernstein (Luxembourg) S.à r.l. Société à responsabilité limitée, R.C.S. Luxembourg B 34 305, 2-4, rue Eugène Ruppert, L-2453 Luxembourg. Authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results.

This information is directed at Professional Clients only and is not intended for public use.