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.
[1] Source: AXA IM as of 31 July 2025.
Important information
Marketing communication. For professional investors only.
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 investment. There is no guarantee that the performance objective will be achieved.
Fixed income sub-funds may be exposed to other risks defined below:
CAPITAL LOSS RISK: The value of the investments in Financial Instrument(s) and the returns generated by the described funds may go down as well as up. Investors may not get back the amount they originally invested.
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 sub-funds are exposed, which may therefore cause the value of the investments to go down. Sub-funds 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.
COUNTERPARTY RISK: This risk relates to the quality or the default of the counterparty with which the Management Company negotiates, in particular involving payment for/delivery of financial instruments and the signing of agreements involving forward financial instruments. This risk is associated with the ability of the counterparty to fulfil its commitments (for example: payment, delivery and reimbursement). This risk also relates to efficient portfolio management techniques and instruments. If counterparty does not live up to its contractual obligations, it may affect investor returns.
MMFs ARE NOT GUARANTEED INVESTMENTS. An investment in MMFs is different from an investment in deposits, there is a risk that the principal invested in an MMF is capable of fluctuation. The MMF does not rely on external support for guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share. The risk of loss of the principal is to be borne by the investor.
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 Sub-Fund’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: www.bnpparibas-am.com.