Income within market bringing high returns from high yield bonds

The high yield bond market has been one of the better performing asset classes during 2009, delivering both a high income and capital gains.

The IMA £ High Yield sector has risen 31% in the first eight months of 2009. To be fair, this should come as no surprise, since an asset class that is highly credit-sensitive ought to respond well to any improvement in the credit markets. Some commentators, however, are wondering whether high yield bonds can continue to deliver such strong gains. There has been heavy issuance of investment grade bonds in the US and Europe. Globally, high yield issuance is much smaller, although it has risen 96% in the first six months of this year from the same period a year ago. Most of this has occurre...