High-Yield Bonds Market - Global Forecast Report 2024-2032

Market Outlook

According to this report, the high-yield bonds market size reached a value of USD 5.31 trillion in 2023. Aided by the increasing demand for higher returns on investments and the growing applications of high-yield bonds in various financial strategies, the market is projected to further grow at a CAGR of 4.3% between 2024 and 2032 to reach a value of USD 7.76 trillion by 2032.

High-yield bonds, often referred to as junk bonds, are debt securities that offer higher interest rates due to their lower credit ratings compared to investment-grade bonds. These bonds are typically issued by companies with higher risk profiles but offer attractive returns to compensate for the increased risk. The key benefits of high-yield bonds include higher income potential, diversification of investment portfolios, and potential for capital appreciation.

The increasing investor preference for higher returns is driving the high-yield bonds market growth. With the growing awareness of the benefits associated with high-yield investments, there has been a significant shift towards high-yield bonds, leading to a surge in demand. Additionally, the rising trend of alternative investments has further contributed to the increasing popularity of high-yield bonds, as they offer a viable option for investors seeking to diversify their portfolios and enhance their income potential.

The expanding applications of high-yield bonds in various financial strategies also play a significant role in propelling the market. In portfolio management, high-yield bonds are used to enhance income and provide diversification. In corporate finance, companies issue high-yield bonds to raise capital for expansion, acquisitions, and refinancing existing debt. Moreover, high-yield bonds are utilised by hedge funds and private equity firms as part of their investment strategies to achieve higher returns.

Further, the growing focus on emerging markets has led to an increased interest in high-yield bonds issued by companies in developing economies. With advancements in credit rating methodologies and risk assessment tools, investors are better equipped to evaluate the risk and return potential of high-yield bonds, consequently driving up the high-yield bonds market share.

In addition to providing higher income, high-yield bonds also offer the potential for capital appreciation. As the creditworthiness of the issuing company improves, the price of high-yield bonds can increase, leading to capital gains for investors. This capital appreciation potential enhances the overall return profile of high-yield bonds, making them an attractive investment option.

The expanding applications of high-yield bonds in various financial strategies are a significant driver of the market. In portfolio management, high-yield bonds are used to enhance income and provide diversification. In corporate finance, companies issue high-yield bonds to raise capital for expansion, acquisitions, and refinancing existing debt. Moreover, high-yield bonds are utilised by hedge funds and private equity firms as part of their investment strategies to achieve higher returns.

As per the high-yield bonds market analysis, corporate bonds include high-yield bonds issued by corporations to raise capital for expansion, acquisitions, and refinancing existing debt. The demand for corporate bonds is driven by the need for companies to secure funding for growth initiatives. Sovereign bonds includes high-yield bonds issued by governments or government-related entities in developing economies. The demand for sovereign bonds is driven by the need for countries to finance infrastructure projects and economic development initiatives. Municipal Bonds includes high-yield bonds issued by local governments and municipalities to fund public projects. The demand for municipal bonds is driven by the need for local authorities to secure funding for infrastructure and community development projects.

Market Segmentation

The market can be divided based on type, end use, and region.

Market Breakup by Type

• Fallen Angels
• Rising Stars

Market Breakup by End Use

• Retail Investors
• Institutional Investors
• Others

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• Europe

Competitive landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in global high-yield bonds market. some of the major players explored in the report are as follows:

• BlackRock, Inc.
• Morgan Stanley
• M&G plc Group
• Alcentra Limited
• The Vanguard Group, Inc.
• Aegon Group
• Northern Trust Corporation
• The Charles Schwab Corporation
• T. Rowe Price International Ltd
• Nomura Asset Management Group
• Others