INGREDIENTS FOR EQUITY-LIKE RETURN POTENTIAL
High yield bonds can offer an attractive risk–return profile, supporting their role as a strategic allocation within multi‑asset portfolios. Their potential for strong risk‑adjusted returns, combined with historically lower drawdowns during periods of market uncertainty, also makes them an effective diversifier alongside equities.
Global High Yield Annual Returns, 2001 - YTD 2026
Historically, high yield bonds delivered ~7% annualised returns, with less downside than equities
Past performance does not guarantee future results. Source: Morningstar, as of 30/1/2026. Historical performance calculated using monthly USD-hedged returns from 28/2/2001 to 30/1/2026. Risk measured by volatility = standard deviation. Historical annual total returns (bar chart) and monthly performance (table) using USD-hedged returns. High yield represented by ICE BofA Developed Markets High Yield Index and equities by MSCI World (USD Hedged) Index. Investors cannot invest directly in an index. 1 Source: BoAML par issuer-weighted default rates trailing 12m, as of 2/2/2026
Equipped to achieve excellence
PGIM Fixed Income team was named “2025 Best Fixed Income Manager” by AsianInvestor in the Asset Management Awards 2025.
*The recognition was based on a comprehensive evaluation process considering both quantitative performance metrics and qualitative assessment by AsianInvestor’s judging panel. Performance was measured against widely tracked benchmarks with particular attention to risk-adjusted returns during the 2024 calendar year, specifically on the firm’s ability to navigate market volatility and consistent performance across multiple fixed income strategies.
Equipped For Outperformance
Sources of data (unless otherwise noted) are as of 30/06/2026.
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
The views expressed herein are those of PGIM investment professionals at the time the comments were made, may not be reflective of their current opinions, and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither PFI, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
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