High Yield

UBS maintains a neutral stance on high yield debt, noting that while fundamentals are solid, current spreads at the low end of their historical range limit future price appreciation. Returns are expected to be driven primarily by carry.

Key Takeaways

• 1.UBS maintains a neutral recommendation on high yield bonds, citing historically tight spreads and expectation that future returns will be driven primarily by carry/yield.
• 2.HY fundamentals remain healthy with low default rates and conservative balance sheets, though market volatility is sensitive to geopolitical energy risks.

Table of Contents

• High yield
• Global Asset Class Preference
• Central scenario
• Upside scenario
• Downside scenario
• Global asset class preferences definitions
• Appendix

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