What is a high yield bond?

High yield bond: Corporate bonds rated below BBB- or Baa3 by established rating agencies. Interest rate risk: When interest rates rise, the market value of fixed-income securities (such as bonds) declines. Similarly, when interest rates decline, the market value of fixed-income securities increases.

What is US corporate BBB effective yield?

View and export this data back to 1996. Upgrade now. US Corporate BBB Effective Yield is at 6.01%, compared to 5.98% the previous market day and 4.84% last year. This is higher than the long term average of 5.25%.

Why do investors prefer BBB bonds?

This is due to a number of global factors. In the U.S., after years of near-zero interest rates, investors are searching for yield, making them look at lower-quality investment grade securities like BBB bonds.

What is an investment grade bond?

A bond is considered investment grade or IG if its credit rating is BBB− or higher by Fitch Ratings or S&P, or Baa3 or higher by Moody's, the so-called "Big Three" credit rating agencies. Generally they are bonds that are judged by the rating agency as likely enough to meet payment obligations that banks are allowed to invest in them.