Deep Dive
Improved credit quality, expectations for a mild recession or soft economic landing and current valuation discounts all bode well for high-yield bonds
Sanford and Son. Right now you can get junk bonds at a discount, possibly setting up gains down the line, especially if interest rates begin to decline.
Courtesy Everett Collection
High-yield bonds are also known as junk bonds — they are riskier than investment-grade bonds and pay much higher interest rates. But the current set of circumstances might lead to excellent performance over the next few years for investors who focus on the space right now.
Below are comments from Paul Dlugosch and Jeffrey Deardorff, who co-manage the Buffalo High Yield Fund along with Jeffrey Sitzmann, as well as thoughts about the direction of the bond market, interest rates and the economy from Garrick Bauer and Nick Sargen…
