High-yield bonds: is now the time to buy?

High-yield bonds have fallen dramatically since the start of the credit crunch but have they reached the bottom of the cycle?

Concerns regarding the global economic environment and further instability within the banking sector have seen financial markets across the globe reach historic lows. As to be expected, those asset classes traditionally considered to be higher risk have borne the brunt of this weakness and in turn have created some unique investment opportunities. The high-yield-bond market provides an excellent example of an asset class that has suffered a significant deterioration since the so-called credit crunch began with the collapse of two prominent hedge funds at Bear Stearns in July 2007. In fac...