1. They exhibit negative correlation with government bonds

US high yield weekly return correlation with US Treasury Bond Market (1997-2016)

Source: Bloomberg

 

2. They show resilience to negative events

Transocean: short vs medium maturities

Source: Bloomberg
 

3. They offer a positive real yield with little duration risk

Bond yields versus CPI

Sources: Kames Capital; Bloomberg. Data as at 14 December 2017

 

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