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Tapping into liquidity in the high-yield bond market

Tapping into liquidity in the high-yield bond market

How can investors access the potential for greater returns from the high-yield bond market while keeping liquidity risk in check?

While high-yield bonds have generally been excluded from traditional aggregate-type fixed income benchmarks in the past, they remain a growing asset class that has historically offered yields exceeding those of investment-grade debt.

In exchange for incremental yield, however, high-yield bonds can be associated with heightened credit and liquidity risk. Designed to track the most liquid instruments in the high-yield market, the iBoxx US dollar liquid high-yield index has served as this market’s leading benchmark since its debut in 2006, supporting a broad trading ecosystem via exchange-traded funds and derivatives.

This two-part white paper examines the components of the iBoxx US dollar liquid high-yield index that has demonstrated potential mitigation of liquidity risk.

  • Tapping into liquidity in the high-yield bond market: part one highlights the growth of the high-yield bond market and the index construction attributes that contribute to the iBoxx US dollar liquid high-yield index liquidity ecosystem. Research measures the effectiveness of the index methodology in current markets through bond-liquidity analysis.

These white papers are essential reading for investors looking to understand more about accessing liquidity in the high-yield bond market.

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