Market Views: Will high-yield bonds shine if interest rates slide?
As the rate-cutting cycle approaches, fund managers are evaluating whether global and Asian high-yield bonds are becoming more appealing and how investors should approach the asset class.
Global high-yield bonds have delivered strong risk-adjusted returns over many years for patient investors. As US interest rates peak and are poised to decline, issuers should benefit from lower financing costs, improved cash flows, and stronger bond demand.
While the Asian high-yield bond market experienced turbulence due to China's property woes, the situation has stabilised, with Asian high-yield bonds delivering a robust 12% return year-to-date.
Should the Federal Reserve ini…
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