Aviva Global High Yield Bond

This information on Aviva Global High Yield Bond was presented on September 2016.

From Aviva’s perspective, there are 2 major risks when investing in high yield bonds:

1. Probability of default
2. Severity of loss

Here shows the track record of Aviva:

Here is the track record of Aviva Global High Yield, as of 2016-08-31:

Here is how the fund is positioned as of 2016-08-31:

Based on risk and return characteristics of various assets, High Yield is probably one of the most attractive:

The table below shows the bond credit rating by Moody’s and Standard & Poor’s

The chart below show the performance of different rating of bonds:

We observed that one grade below the Investment Grade bond, i.e. Ba or BB would generate the best return in the long run. This is then followed by Baa or BBB, the investment grade. The rationale behind that is because of the potential upgrade from Junk to investment grade.