High Yield bonds typically offer higher interest rates than government bonds or high grade corporates, and they have the potential for capital appreciation in the event of a rating upgrade, an economic upturn or improved performance at the issuing company.

Also, because the high yield sector generally has a low correlation to other sectors of the fixed income market along with less sensitivity to interest rate risk, an allocation to high yield bonds may provide portfolio diversification benefits.

In addition, high yield bond investments have typically had and may continue to offer equity-like returns over the long term with less volatility.