Select Investor Profilechevron

What type of investor are you?

Individual Investor
Institutional Investor
phone iconContact

Why Current Yields are Pointing to Potentially Attractive Returns in High Yield

panelImage

History may help explain how current yields can possibly be an effective indicator on the future returns of high yield investments. As a combination of factors has led to more repressed returns in recent years, the points and exhibit outlined below can further illustrate why we see a brighter outlook for this asset class in years to come.

  • Over the last 15 years, current effective yields for the ICE BofA U.S. High Yield Index have proven solid in gauging what the benchmark’s realized returns will be looking like 5 years out.
  • The Index’s most recent 5YR return of 3.12% was somewhat muted as effective yields were at subdued levels to start the period at 6.25% given the combination of ultra-low government interest rates and tighter credit spreads.
  • As of 04/30/2023, the yield outlook appears more favorable with a current effective yield of 8.19.%.

Source: ICE Data Services and Morningstar Direct.

We believe high-yield bonds can serve as a key long-term diversifier and yield generator in portfolios. Learn more: The Case for A Strategic Allocation to High-Yield Bonds and SIHY.

Harbor Capital Advisors is an asset manager known for curating an intentionally select suite of active ETFs from boutique managers. Advisors looking for distinct and differentiated investment options for their clients’ portfolios often connect with our passionate obsession to find what we believe to be the best – bold solutions that have the potential to produce compelling, risk-adjusted returns. For more information, visit www.harborcapital.com.

(866) 313-5549 (Institutional Service Desk) | HarborCapital.com | info@HarborCapital.com | Find your Sales Rep


Important Information

For Institutional Use Only. Not for Distribution to the Public.

Investing involves risk, principal loss is possible. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value. Harbor ETFs are new and have limited operating history to judge.

Shares are bought and sold at market price not net asset value (NAV). Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times.

Fixed income securities fluctuate in price in response to various factors, including changes in interest rates, changes in market conditions and issuer-specific events, and the value of your investment in the Fund may go down. There is a greater risk that the Fund will lose money because they invest in below- investment grade fixed income securities and unrated securities of similar credit quality (commonly referred to as “high-yield securities” or “junk bonds”). These securities are considered speculative because they have a higher risk of issuer default, are subject to greater price volatility and may be illiquid. Because the Fund may invest in securities of foreign issuers, an investment in the Fund is subject to special risks in addition to those of U.S. securities. These risks include heightened political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, possible sanctions by government bodies of other countries and less stringent investor protection and disclosure standards of foreign markets.

In relation to any data attributed to Morningstar, please note the following: © Morningstar 2023. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.

The views expressed herein may not be reflective of current opinions, are subject to change without prior notice, and should not be considered investment advice.

Investing entails risks and there can be no assurance that any investment will achieve profits or avoid incurring losses.

BlueCove Limited is a third-party subadvisor to the Harbor Scientific Alpha High-Yield ETF.

2899526 

Blue Background

Connect with us | LinkedIn Logo IconLinktree icon to podcast media links

Harbor Funds Distributors, Inc. is the Distributor of the Harbor Mutual Funds.
Foreside Fund Services, LLC is the Distributor of the Harbor ETFs.
FINRA Brokercheck logo in white color

Investing involves risk and the potential loss of capital.

Investors should carefully consider the investment objectives, risks, charges and expenses of a fund before investing. To obtain a summary prospectus or prospectus for this and other information, click here or call 800-422-1050. Read it carefully before investing.

All trademarks or product names mentioned herein are the property of their respective owners. Copyright © 2024 Harbor Capital Advisors, Inc. All rights reserved.