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Corporate bonds are offering their best yields in years, but risks remain

The outlet argues that even with higher long-term yields, investors may not get enough compensation because risk levels are also elevated.

Reported · Written up by our desk · Government Bonds

WSJ Markets says corporate bonds are delivering the best yields in years. The publication cautions that the higher yield environment does not automatically translate into attractive, risk adjusted returns.

The report’s core point is that any yield advantage may be outweighed by increased risk, particularly in the long dated part of the market, even as long term rates have moved higher.

It also notes that investors are facing a tradeoff, where higher income potential comes alongside a higher likelihood of adverse outcomes, leaving the overall payoff less certain than the yield headline suggests.

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