Don't rule out high-yield bonds yet

London

THE high-yield boom is heading for hold-your-nose territory. Egged on by central banks, bond investors will keep chasing yield, despite a market sell-off, a few blow-ups and rising corporate indebtedness.

By early December, 2014's high-yield issuance exceeded US$400 billion, with Europe breaking records at US$165 billion, according to Thomson Reuters data. At the end of the third quarter, default rates stood at just 2.1 per cent.