Why we prefer U.S. equities and high yield bonds | Northern Trust …

Dec 27, 2024 · The promising U.S. economic outlook back U.S. stocks while yields and our expectations of low defaults support high yield bonds. ... High Hopes, Solid Grounds We prefer …

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2025 Global Investment Outlook: Expect U.S. Stocks To

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Nov 26, 2024 · CHICAGO and LONDON — Northern Trust Asset Management (NTAM), a leading global investment management firm with $1.3 trillion in assets under management as of …

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Why High Yield Bonds Could Benefit Portfolios In 2024

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Jan 30, 2024 · Based on data going back to 2000, high yield bonds with yields of 7% to 8%, the range we’re seeing now, have produced a median return of 7.4% a year later with positive …

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Why High Yield Bonds Could Benefit Portfolios In 2024 - Northern …

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Generally, high yield bonds with yields from 6% to 10% represented the sweet spot for year-forward returns in this analysis. EXHIBIT 2: THE HISTORICAL 'SWEET SPOT' FOR YIELDS. …

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FAQs about Why we prefer U.S. equities and high yield bonds | Northern Trust … Coupon?

Why do we prefer high yield bonds over investment grade bonds?

We expect U.S. equities to benefit from an economic soft landing and healthier corporate profits than most other regions. Within fixed income, we continue to favor high yield bonds over investment grade bonds because of elevated yields, strong fundamentals and a supportive market backdrop. ...

Are high-yield bonds a risky asset?

At Northern Trust Asset Management, we classify high-yield bonds as “the least risky risk asset” because they historically have delivered equity like returns without equity like volatility over the full market cycle thanks in part to their income component. The asset class has grown from $500 billion in 2002 to more than $1.5 trillion today. ...

Are high-yield bonds a good investment?

This favorable trend is rooted in a notable confluence of solid fundamentals, low default risk, and strong performance relative to equities in volatile markets. In addition to their capacity as a yield-producing mainstay, high-yield bonds can help investors optimize portfolio diversification given their resilience during periods of equity decline. ...

Why did investors invest in high-yield bonds in 2024?

Unknown catalog request error. Throughout the first half of 2024, investors were allocating to high-yield bonds with goal of achieving attractive returns combined with important diversification benefits. These returns were driven by expectations of a mixture of high carry and a more modest spread compression potential. ...

Should you invest in high yield bonds?

Whether compared to the S&P 500 or relative to a traditional 60/40 portfolio, high yield has consistently delivered higher risk-adjusted returns over the past two decades. Our risk framework suggests maintaining risk positions within dedicated fixed-income and multi-asset portfolios, with high yield bonds remaining a key component. ...

Why do we prefer equities over fixed income?

We favor U.S. equities, supported by strong expected sales and earnings growth, and high yield bonds, backed by solid fundamentals. OVERVIEW For 2025, we maintain a preference for equities over fixed income. We expect U.S. equities to benefit from an economic soft landing and healthier corporate profits than most other regions. ...