Skip to main content
Insights

Global High Yield Update: Q3 2025

Resilient Returns in a Soft-Landing Scenario

Executive Summary:

  • Global HY saw a positive Q3 on resilient growth and Fed easing.
  • Defaults fell, high issuance was mostly for debt rollover, and inflows stayed strong.
  • Yields remain appealing, though spreads sit in the richest decile.

Performance/Market Highlights:

Global high-yield spreads remained near record lows, delivering positive quarterly returns amid strong US growth, resilient consumer spending, and a pre-emptive Fed rate cut. Investors anticipate a soft landing, with only mild weakness in late 2025 and growth rebounding by early 2026. Risk-on sentiment has prevailed, lifting growth and income assets, led by the S&P 500’s 14.8% YTD gain.