Executive summary

High Yield Debt can be a very useful addition to most investors’ portfolios. In practice, High Yield Debt comes in many different forms with very different risk, return and liquidity characteristics. The common denominator is that High Yield Debt consists of loans where there is a meaningful chance of default. Which begs the question - why bother? The higher interest rates paid on these loans more than compensate for potential losses so that, in the long-term, High Yield Debt produces returns that are close to those of Equities, but with lower risk.

• Long-term retu...