Our approach to high yield bond investing

We follow a global approach, scouring the world's markets to create high-conviction, risk-aware high yield portfolios that do not rely on a benchmark for portfolio construction.

Holistic global portfolios

Our global portfolios are constructed free from regional sleeves, giving our team more levers to pull to generate alpha as well as opportunities for arbitrage from multi-currency issuers.

Connected thinking

Our portfolios benefit from the cross-pollination of ideas from our global investment professionals across all asset classes. This is facilitated by an integrated research framework across equities and credit with strong in-house ESG expertise.

Higher quality

In pursuit of superior risk-adjusted returns we focus on higher-rated credits, with a tactical allocation to lower quality when appropriate.

Potential benefits

Offering diversification and attractive income potential, high yield bonds can play an important role in a balanced portfolio of assets.

Diversification

Given their low to moderate correlation with other asset classes, high yield bonds can provide diversification within a balanced portfolio.

Smoother returns

Over the past 25 years, high yield bonds have delivered similar returns to equities, but with almost half the volatility.

Attractive income

High yield bonds represent a rare source of competitive income at a time when yields are abnormally low.

Key risks

Investment risk

The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.

Credit risk

Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.

Derivatives risk

The strategies may use derivatives; these can be complex and highly volatile. Derivatives may not perform as expected, which means the strategies may suffer significant losses.

Investor in funds

The strategies may invest in other strategies; this means the overall strategy charges may be higher.

Illiquid securities risk

Certain assets held in the strategies could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

High yield investment strategies

Aviva Investors Global High Yield Bond Strategy

This strategy aims to maximise total returns and generate income. We have a strong emphasis on limiting drawdowns by investing in a high conviction, diversified portfolio of global high yield bonds.

Aviva Investors Short Duration Global High Yield Bond Strategy

This strategy follows a similar approach to its Global High Yield cousin but focuses on bonds with a maturity of five years or less and duration of three years or less.

Need more information?

For further information, please contact our investment sales team.

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