What is high-yield bond?
High-Yield Bond offers a higher yield than other types of bonds. These often come with higher risk than the most highly rated debt instruments due to their regular repayment status and structure in case of default. As such, High-Yield Bonds are an appealing option for cost-conscious investors who are comfortable taking on additional risk in order to generate greater returns.
How to invest in high-yield bonds?
It involves buying bonds issued by a company or institution to raise capital at a rate higher than the market rate. These bonds are usually unsecured, which means they lack collateral but can offer returns much higher than government bonds and other fixed-income investments. High-yield bond portfolios should be built through careful research and proper due diligence as there is always the risk of default or destruction of principal.