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 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 Prospectus and KID.
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[1] Source: AXA IM as of 31 July 2025.
Important information
This material is issued by BNP PARIBAS ASSET MANAGEMENT Malaysia Sdn Bhd, an investment management company holding a Capital Markets Services Licence under the Capital Markets and Services Act 2007 of Malaysia, having its principal place of business at Vista Tower, Level 48D, The Intermark 348 Jalan Tun Razak 50400 Kuala Lumpur, Malaysia. This material has not been reviewed by the Securities Commission Malaysia.
This material is produced for information purposes only and does not constitute:
- an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
- investment advice.
Opinions included in this material constitute the judgement of the investment management company at the time specified and may be subject to change without notice. The investment management company is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for an investor’s investment portfolio.
Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to financial instruments may have a significant effect on the results presented in this material. Past performance is not a guide to future performance and the value of the investments in financial instrument(s) may go down as well as up. Investors may not get back the amount they originally invested.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
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 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 strategies described being in risk of capital loss. There is no guarantee that the performance objective will be achieved.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Environmental, social and governance (ESG) investment risk: The lack of common or harmonised 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, performance may at times be better or worse than the performance of relatable strategies that do not apply such standards.
This is not an exhaustive list of risks. For a complete description and definition of risks, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.