US Dynamic high yield bonds
Flexible US high yield solution that seeks to generate higher total returns than the market through a concentrated, nimble portfolio.
The opportunity
High yield bonds typically offer investors higher income to compensate for lower credit ratings. The US is the largest and most liquid high yield market with broad diversification across sectors, maturities, and ratings.
Withing the US high yield market, the average quality rating has improved over the past decade. Structural changes such as this have lead to narrower spreads, reflecting the lower default levels we are experiencing and, we believe, an increased confidence in the market.
With the potential for equity-like returns but lower volatility, high-yield bonds may be seen as an alternative to equities, especially in these unpredictable markets.
Strategy highlights
Access US high yield expertise
Our experienced US High Yield investment team, who are based in the US, employ a tried and tested investment process that is designed for this asset class. Through our expertise and capabilities, clients have access to a wide range of high yield solutions.
Seek stronger returns than the market
The strategy aims to deliver equity-like returns with volatility in line to slightly higher than the broad US high yield market. To achieve this, we focus on capturing yield advantage without giving away returns through defaults or significant losses.
Invest differently
We look to take meaningful positions that reflect idiosyncratic credit opportunities. Our high conviction approach means the strategy’s composition is different to that of funds tracking the US high yield index.
Team and expertise
The strategy sits within the US high yield Investment team and is managed by Michael Graham, who has 20 years industry experience. He is supported by Robert Houle, Senior Portfolio Manager and David Shapiro, Portfolio Manager/Analyst. The US high yield investment team are supported by a dedicated US high yield trading team, as well as broad range of resources in research and execution.
The US High Yield investment team manage over $13.5bn assets1 which supports this strategy by enabling best execution and access to trading opportunities not available to smaller managers.
Investment risks
Investments are subject to market and currency exchange fluctuations and other risks inherent to investing in securities. The value of investments and the income they generate may rise or fall and it is possible that investors may not recover their initial investment.
The strategy may be exposed to specific risks listed below:
- Derivatives and leverage 144A securities
- Defaulted Securities
- Extension
- Reinvestment
- High yield debt securities
- Contingent convertible bonds
- Distressed securities
For a complete description and definition of the strategy’s generic and specific risks, please refer to the respective prospectus.
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[1] Source: AXA IM as of 31 July 2025.
Important information
Marketing communication.
The information provided here is for advertising purpose. It shall not constitute legal, financial or tax advice, nor is it an offer or recommendation for the purchase or sale of financial instruments.
Past performance or achievement is not indicative of current or future performance.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market and currency exchange fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Equity strategies may be exposed to other risks defined below:
MARKET RISK: This is a general risk that affects all investments. Price for financial instruments are mainly determined by the financial markets and by the economic development of the issuers, who are themselves affected by the overall situation of the global economy and by the economic and political conditions prevailing in each relevant country
EQUITY RISK: The risks associated with investments in equity (and similar instruments) include significant fluctuations in prices, negative information about the issuer or market and the subordination of a company’s shares to its bonds. Moreover, these fluctuations are often amplified in the short term. the risk that one or more companies suffer a downturn or fail to grow can have a negative impact on the performance of the overall portfolio at a given time. There is no guarantee that investors will see an appreciation in value. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the strategies are exposed, which may therefore cause the value of the investments to go down. Strategies investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
LIQUIDITY RISK: This risk arises from the difficulty of selling an asset at a fair market price and at a desired time due to a lack of buyers.
COUNTERPARTY RISK: This risk is associated with the ability of a counterparty in a financial transaction to fulfil its commitments like payment, delivery and reimbursement.
OPERATIONAL AND CUSTODY RISK: Some markets are less regulated than most of the international markets; hence, the services related to custody and liquidation for the strategy in such markets could be more risky.
DERIVATIVES RISK: When investing in over-the-counter or listed derivatives, the fund aims to hedge and/or to leverage the yield of its position. The attention of the investor is drawn to the fact that leverage increases the volatility of the strategy.
CAPITAL RISK: The investments in the funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the strategy’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.