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Corporate and High Yield Bonds

Learn about the corporate bond and high yield bond markets, including the risks, long-term returns,  drivers of performance, and potential investment strategies.

What is a Yield Spread?
The yield spread is one of the key metrics that bond investors can use to gauge how expensive or cheap a particular bond – or group of bonds – might be. Learn more about yield spreads and how they can help you make better investment decisions.

What Are Bond Credit Ratings?
Bond credit ratings provide a guide the strength of the issuer’s finances and its future prospects – and allow investors to gain a sense of how likely a bond is to default. Learn more about bond credit ratings, and what each credit tier – from AAA to D – can tell you about an individual bond.

 

The Basics of Investing in Corporate Bonds
Learn about the risks and historical performance of corporate bonds, their role in your portfolio, and the various ways to invest in corporate bonds.

Corporate Bonds Calendar Year Performance 1980-2013
See year-by-year, calendar year total returns for investment-grade bonds from 1994 to 2013, plus their relative performance vs. the broader bond market.

Understanding the Performance of Corporate Bonds
Three main factors influence the performance of corporate bonds: prevailing interest rates, the health of the issuing corporation, and investors' attitude toward risk. Find out how these factors work together to affect the returns of corporate bonds.

The Risks of Corporate Bonds
Learn more about the risks of corporate bonds, and the difference between the risk of individual corporate bonds versus corporate bond funds and ETFs.

How to Buy a Corporate Bond
Buying individual corporate bonds is a complex endeavor. It takes more sophistication and more research than buying a share of stock. Here's some of the key things to consider.

U.S. Companies Rated AAA - Higher than U.S. Government Bonds
The highest credit rating, AAA, is typically reserved for government bonds, but four U.S. corporations are also assigned this gold standard of good credit: Microsoft, Johnson & Johnson, Automatic Data Processing, and Exxon Mobil. Learn more about the “Big 4” of AAA-rated U.S. corporations, and why they're rated higher than U.S. Treasuries.

How Do Takeovers Affect Corporate Bond Prices?
The impact of takeovers on bonds: Find out how corporate takeovers can affect the bond prices of both the buying and selling companies.

Apple Bonds: What You Need to Know
The basics of Apple's bond offering: Find out all the details of the largest offering in the history of corporate bonds, including its size, maturity dates, initial yields, credit rating, and the reason why Apple chose to issue bonds when it did.

The Basics of Investing in High Yield Bonds
Learn about the risks and historical performance of high yield bonds, their role in your portfolio, and the various ways to invest in high yield bonds.

High Yield Bonds: The Historical Performance Numbers
Historical performance for high yield bonds: find out the year-by-year total returns for high yield bonds vs. both stocks and investment-grade bonds.

The Risks of High Yield Bonds
What are the risks of high yield bonds? Learn more about the risks of high yield bonds, and the difference between the risk of individual high yield bonds compared to high yield bond funds and ETFs.

Using High Yield Bonds for Diversification
Learn how high yield bonds can help you diversify your investment portfolio. While high yield bonds can diversify a portfolio that is tilted toward investment-grade bonds, they won't necessarily help you diversify away from stocks.

When is the Best Time to Buy High Yield Bonds?
What circumstances regarding the economy, investor sentiment, and corporations' financial health typically fuel the best returns for high yield bonds?

High Yield Bonds: Strong Performance When Rates are Rising
High yield bonds have a track record of performing well even when the rest of the bond market is weak. Is high yield still the best option when prices are falling?

Should You Buy a Short-Term High Yield Bond Fund?
Short-term high yield bonds funds: their risks, return potential, and usefulness in a rising-rate environment.

Should You Invest in Hedged High Yield Bond ETFs?
Hedged high yield bonds ETFs sound good on paper, but there are many reasons why a hedged approach is an inefficient way to invest in high yield bonds.

What are Fallen Angels?
Find out what a fallen angels are, how to invest in fallen angels, and whether the return potential is worth the risk in this segment of the high yield bond market.

What are Senior Loans?
Senior loans, also referred to as leveraged loans or syndicated bank loans, offer diversification and attractive yields, but also a unique set of risks. Are senior loans right for you?

Why Rising Treasury Yields Don’t Boost the Yields on Senior Loan Funds
Senior loans offer floating rates, but how are floating rates calculated? Senior loans may not provide the protection against rising Treasury yields that many investors expect.

Understanding Callable Bonds
Some bonds have an unusual feature that allows the issuer to "call" back the bond and pay off the principal early. That poses some additional risk to investors in the debt market. But there are also some additional rewards available to buyers of callable bonds.

Investing in Emerging Market Corporate Bonds
Find out how to invest in emerging market corporate bonds, and whether this high-yielding asset class is right for you.

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