After high yield bonds enjoyed a dominant performance in 2024, some experts and advisors were uncertain whether the high yield momentum could continue in 2025.
For a moment, it seemed like the naysayers may be correct. When tariff threats reached a fever pitch in early April, high yield bonds tumbled alongside the rest of the market. However, as the month progressed, junk bonds mounted a significant comeback, largely returning to profitable levels by the beginning of May.
Ever since, high yield bonds have gone back to offering highly competitive results compared to their investment-grade counterparts. With demand for portfolio income on the rise, advisors and investors may continue to look to junk bonds as a way to diversify and lock in compelling yield.
Even with their attractive benefits, high yield bonds could be adversely affected by the persistent risk of a recession. Keeping this in mind, it could be prudent to build exposure to high yield strategies that tilt toward risk management.
How AHYB Stands Out From the Crowd
The American Century Select High Yield ETF (AHYB ) offers an approach to high yield investing that may be able to meet the moment. Much like other high yield offerings, AHYB looks to provide attractive returns and competitive regular income.
Where AHYB stands out from its high yield peers is through its asset selection process. The fund uses a bottom-up investment approach, looking for securities that have strong fundamentals that can endure a variety of different market and economic cycles.
Crucially, AHYB focuses the lion’s share of its portfolio in bonds rated BB and B. This focus on higher credit quality can mitigate some of the risk of default that is oftentimes associated with high yield strategies.
Combined with the flexibility of its active management team, AHYB could offer a less risky take at high yield investing. This strategy could provide the yield and diversification to meet the moment, while being able to plan ahead against potential risk factors.
Even with its risk-managed approach, AHYB is offering higher yield than many fixed income ETFs currently on the market. As of May 30, 2025, the fund has a 30-day SEC unsubsidized yield of 6.29%.
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