Issues to consider when investing in high yield products
~ Why is the investment high yield — where does this additional yield come from?
~ What are the main risks associated with the investment?
~ What is the risk profile attached to the different high yield instruments, and is the investment considered growth or defensive?
~ Should you make specific allocations to high yield investments, or invest in a diversified fixed income product and leave the manager to decide on the allocation to high yield?
~ What signals are relevant when considering making an allocation or increasing your allocation to high yield investments?
~ If considering a particular bond issue, ask about the price and expected yield; the maturity date, and if the bond can be redeemed early; the credit rating, and what this means for risk; and the price.
Source: Mercer Wealth Solutions
Recommended for you
In this episode of Relative Return Unplugged, hosts Maja Garaca Djurdjevic and Keith Ford discuss the corporate regulator’s recent discussion paper looking into the rapid growth of private markets and the role of superannuation funds in this “opaque” sector.
On this episode of Relative Return Unplugged, host Maja Garaca Djurdjevic is joined by AMP’s chief economist Shane Oliver to break down the Reserve Bank of Australia’s long anticipated rate cut to 4.1 per cent.
In this episode of Relative Return Unplugged, hosts Maja Garaca Djurdjevic and Keith Ford, along with special guest Liam Garman, break down the economic landscape ahead of the Reserve Bank’s highly anticipated first rate call of 2025.
In this episode of Relative Return, host Laura Dew chats with David Russell, chair of the Transition Pathway Initiative, and Tony Campos, head of sustainable investment at FTSE Russell, about the intricacies of climate investment.
