Is it time to ditch U.S. junk bonds? 🇺🇲📉
While American high-yield markets are feeling the squeeze of tight spreads, Asian Junk Bonds are projected to be the breakout stars of 2026.
Here is why investors are shifting their gaze East:
💰 Superior Yields: Asian high-yield debt is currently yielding roughly 8.1% to 8.6%, handily beating the 6.9% offered by U.S. counterparts.
🛡️ The "Deep Cleanse": After the China property shakeout, the market is leaner and healthier. Chinese real estate now makes up only 19% of the index, down from over 50%.
📉 Record Low Defaults: Default rates are expected to stay below 1% through 2026, driven by a new powerhouse lineup of Indian renewables and Macau gaming.
With an 80-basis-point premium over U.S. and European peers, the risk-reward profile for Asian credit hasn't looked this good in years.
