High-Yield Corporate Bonds Transition to Strategic Asset Class in New Macroeconomic Era
The high-yield corporate bond market has undergone a fundamental transformation, evolving from a speculative income play to a Core strategic asset for long-term capital growth. This shift reflects broader changes in the macroeconomic landscape—higher nominal growth, increased cyclicality, and the end of ultra-low interest rates that defined the post-2008 era.
Credit quality improvements and resilient corporate balance sheets now position junk bonds as compelling alternatives to both traditional fixed income and equities. Institutional investors increasingly view high-yield debt through a strategic lens rather than purely tactical, recognizing its potential to enhance risk-adjusted returns while providing portfolio stability.