The development of global high yield has been decades in the making. High yield, once a market decidedly dominated by US issuance, now consists of issuers from across the globe. Investors looking for better diversification and enhanced alpha opportunities should consider a global approach when allocating to high yield.
As the non-US high-yield markets continue to evolve, we believe the opportunity set is attractive for investors to allocate to global high yield. Global high yield can provide regional, issuer and industry diversification level protection superior to a stand-alone US, European or emerging markets high-yield mandate. Also, adopting a global portfolio increases the alpha opportunities from having a wider investable universe.
Mercer believes the opportunity set is currently attractive for investors to allocate to global high yield.