FONDS professionell Deutschland, Ausgabe 1/2026

Cathy Braganza, senior portfoliomanager at Insight Investment, explains why tightening spreads with high yields create a potentially attractive risk-return balance for credit investors. Credit investors face a market where spreads are tight, but yields are historically high. In fact, in high-yield markets, spreads have arguably narrowed to reflect the improving quality of issuers within the market. The average rating in the market is BB – just a notch below investment grade – making historical spread comparisons less meaningful. We believe the current level of spreads often reflects a fair compensation for the risk taken rather than a result of excessive tightening. Importantly, despite narrower spreads, absolute yields are still attractive, which we believe offers investors a compelling balance of risk and return. STRUCTURAL TRANSFORMATION: We believe structural changes to high-yield credit help explain why spreads are tighter than in the past: O High-yield resilience: Issuers have shown better credit quality and persistently low default rates. Events like the global financial crisis, the pandemic, and interest rate rises taught issuers to strengthen governance and improve financial discipline. O Maturity profile management: Companies have been refinancing ahead of schedule. This benefits investors with early bond calls at a premium. O Private markets pivot: Smaller or more distressed issuers are increasingly turning to private markets for capital, improving the credit quality of the public high yield universe. A WALL OF CASH Retail and institutional investors flocked to money market funds (MMFs) as central banks raised interest rates to combat post-pandemic inflation. Between early 2022 and mid-2025, US MMF assets climbed by $2.3 trillion. But developed market central bank policy has diverged. As cash rates decline and yield curves steepen, we expect investors to move out of cash, which could release significant liquidity into credit markets. HIGH-YIELDCREDIT INA LOW-GROWTHENVIRONMENT We don’t expect a global recession, but we expect economies to remain sluggish. That does not have to be a problem for credit markets, though, as long as nominal growth stays positive. A slow economy can challenge equities, as it implies that profit growth rates will be hard to maintain organically. For fixed income investors, however, the key is reliable debt repayment and not rapid growth. Even modest nominal growth can support credit returns. Historically,when growth has ranged between 0%and 2%, credit – especially high yield – has tended to performwell. ACTIVE EDGE Active credit managers have the potential to add value beyond benchmark yields. Fixed income markets are structurally less efficient and transparent than equities, but that gives skilled managers room to find mispriced assets and inefficiencies. And the rise of passive strategies has, if anything, only widened these distortions. FOR PROFESSIONAL CLIENTS ONLY. Global short-dated high yield: why spreads don’t tell the whole story The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed. For Professional Clients only.This is a financial promotion. Any views and opinions are those of the investment manager, unless otherwise noted. This is not investment research or a research recommendation for regulatory purposes. BNY is the corporate brand of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally. Issued in Germany by BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML), a public limited company (société anonyme) incorporated and existing under Luxembourg law under registration number B28166 and having its registered address at 2-4 Rue Eugène Ruppert L-2453 Luxembourg. BNY MFML is regulated by the Commission de Surveillance du Secteur Financier (CSSF). Dr. Ulrich Gerhard Senior portfolio manager Insight Investment Doc ID 2151050; Exp. 05 / 06 / 26 . T13750 02/26.