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In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events but offer higher yields than investment-grade bonds to compensate for the increased risk.
The Vanguard High-Yield Corporate Fund invests in medium and lower-quality corporate bonds. The fund managers invest in what they consider to be higher-rated junk bonds.
High-yield bonds — sometimes called junk bonds — carry a higher default risk and tend to be issued by companies with weaker financial stability or less reliable income streams. Thus, the yield ...
For Fitch, a bond is considered investment grade if its credit rating is BBB− or higher. Bonds rated BB+ and below are considered to be speculative grade, sometimes also referred to as "junk" bonds. [103] Fitch Ratings typically does not assign outlooks to sovereign ratings below B− (CCC and lower) or modifiers.
Funds may be rated from high to low credit quality. The quality of a fund is the average of the bonds owned by the fund. Funds that pay higher yields typically own lower quality bonds. Like stocks, the price of high-yield bonds is subject to fashion. [3] [4] For example, in late 2008, many high-yield bond funds were priced at 70 cents on the ...
A few weeks ago, CAPS player Valyooo started a lively debate with a blog entry asking for opinions on stocks vs. high-yield bonds. Since then, the Fed has hinted that the easy-money flow might be ...
In Moody's Ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality. Moody's was founded by John Moody in 1909, to produce manuals of statistics related to stocks and bonds and bond ratings.
The credit rating is a financial indicator to potential investors of debt securities such as bonds.These are assigned by credit rating agencies such as Moody's, Standard & Poor's, and Fitch, which publish code designations (such as AAA, B, CC) to express their assessment of the risk quality of a bond.