A lower-rated bond that pays more to compensate
High-yield bonds come from issuers rated below investment grade. The chance of not being repaid is relatively higher, so the yield carries a large premium over government bonds. They hold up while the economy is strong and fall with equities when it weakens, which is why a bond can end up behaving much like a stock.
With government bonds at 1%, a high-yield bond might offer 5%.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.