• Visione

How dynamic high yield responds when spreads widen

High yield offers attractive income, but how can investors stay invested if tight spreads widen? Dynamic high yield uses market signals to adjust risk as conditions change.

Relatori

    Ward Poirters
    Client Portfolio Manager
    Portfolio Manager

Sommario

  • Dynamic high yield has shown resilience in past periods of spread widening
  • Its systematic process adjusts exposure as signals strengthen or weaken
  • Its portfolio structure allows it to reposition quickly

Investors are facing no shortage of reasons for concern. Geopolitical tensions, energy-price risks and uncertainty over central bank policy continue to cloud the outlook. Although spreads have widened in recent weeks, they remain close to historically tight levels.

This suggests that investors are still demanding relatively little extra compensation for taking credit risk. For investors who want to keep earning income from high yield, this creates a challenge: staying invested while managing the risk of a market reversal.

Why do spreads matter?

A high yield bond usually pays more interest than a government bond because there is more risk that the company borrowing the money will struggle to repay it. The spread is that extra yield. If a government bond yields 3% and a high yield bond yields 6%, the spread is three percentage points.

Today, spreads are tight, meaning investors receive relatively little extra yield for taking additional company risk. If confidence in companies weakens, investors may demand more compensation. Spreads then widen, and the prices of existing high yield bonds generally fall. Figure 1 puts today’s position in context: spreads rose sharply during past periods of concern, but are now near the low end of the range shown.

Figure 1 - How the spread on high yield bonds has changed over time

Past performance is no guarantee of future results. The value of your investments may fluctuate.

Source: Bloomberg Global High Yield Index, until the end of September 2026.

Why stay invested in high yield?

Despite tight credit spreads, high yield continues to offer attractive income, with yields around levels not seen for more than two decades. Those yields provide a stronger starting point for returns. The income earned can also help offset some decline in bond prices. Fundamentals across the asset class remain relatively strong. The high yield market has become higher-quality over time, with BB-rated bonds now representing a record share of both the US and European markets.1

When conditions become less supportive, the strategy can reduce exposure; when they improve, it can increase exposure again

High yield can also add diversification to a broader bond portfolio because it behaves differently from more interest-rate-sensitive bonds. Attractive income, relatively solid fundamentals and diversification therefore continue to make a case for staying invested. But tight spreads mean investors also need to be prepared if market conditions worsen. This is where a more flexible approach can help.

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How does dynamic high yield operate in difficult markets?

Traditional high yield strategies generally stay invested so they can earn income and benefit when the market rises. But that also leaves them exposed when high yield bonds fall in value. Dynamic high yield has a different approach: it can adjust how much high yield risk it takes. It does this by monitoring signals such as the extra yield bonds offer, price trends, economic growth and interest rates.

These signals are combined systematically to determine the strategy's level of high yield exposure. When conditions become less supportive, the strategy can reduce exposure to help limit downside risk. But the flexibility also works in the other direction: when conditions are more favorable, it can increase exposure above its neutral level to capture more of the income and return potential available from high yield.

Figure 2 - Market signals guide high yield risk exposure – the aim is not to predict every market turning point perfectly, but to adapt as conditions change

Source: Robeco, October 2026.

Why consider dynamic high yield today?

Today's combination of attractive yields and tight spreads makes flexibility particularly relevant. Dynamic high yield seeks to capture that income while adjusting risk as conditions change. This allows investors to remain in the asset class without having to decide for themselves when to exit or re-enter the market.

Footnote

1Source: KKR, August 2026. BB-rated bonds account for approximately 57% of the US high yield market and 68% of the European high yield market, both record levels.

QI Dynamic High Yield IH EUR

performance ytd (30-9)
-0,19%
Performance 3y (30-9)
7,98%
morningstar (30-9)
5 / 5
SFDR (30-9)
Article 6
Pagamento del dividendo (30-9)
No
Dettagli del fondo
I rendimenti passati non sono indicativi dei possibili risultati futuri. Il valore degli investimenti può subire oscillazioni.Annualizzati (per periodi superiori ad un anno). Le performance si intendono al netto delle commissioni e sulla base dei prezzi delle operazioni.

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Disclaimer Clienti Professionali
Le informazioni e le opinioni contenute in questa sezione del Sito cui sta accedendo sono destinate esclusivamente a Clienti Professionali come definiti dal regolamento adottato da CONSOB con delibera del 15 febbraio 2018, n. 20307 (articolo 35 e Allegato 3) e dalla Direttiva UE n. 2014/65 (Allegato II), e sono concepite ad uso esclusivo di tali categorie di soggetti. Ne è vietata la divulgazione, anche solo parziale. Al fine di accedere a tale sezione riservata, si richiede di confermare di essere un Cliente Professionale, declinando Robeco qualsivoglia responsabilità in caso di accesso effettuato da una persona che non sia un cliente professionale. In ogni caso, le informazioni e le opinioni ivi contenute non costituiscono un'offerta o una sollecitazione all'investimento e non costituiscono una raccomandazione o consiglio, anche di carattere fiscale, o un'offerta, finalizzate all'investimento, e non devono in alcun caso essere interpretate come tali. Prima di ogni investimento, per una descrizione dettagliata delle caratteristiche, dei rischi e degli oneri connessi, si raccomanda di esaminare il Prospetto, i KIDs delle classi autorizzate per la commercializzazione in Italia, la relazione annuale o semestrale e lo Statuto, disponibili sul presente Sito o presso i collocatori. L’investimento in prodotti finanziari è soggetto a fluttuazioni, con conseguente variazione al rialzo o al ribasso dei prezzi, ed è possibile che non si riesca a recuperare l'importo originariamente investito.