High Yield Credit: Fundamentals Regain Control Amid Narrowing Spreads

Columbia Threadneedle’s High Yield Insight (Sept 2025), authored by Chris Jorel, CFA, examines shifting dynamics in the U.S. high-yield market.

• After years of broad-based gains, credit-specific risk has re-emerged, with higher-quality issuers outperforming as weaker names face rising distress.

• The share of negative return outliers tripled in 2025, underscoring the growing dispersion and need for selective, research-driven positioning.

• With spreads near multi-decade lows, rigorous credit analysis and downside protection are crucial to navigate the next phase of the cycle.

How can investors identify durable alpha sources as high-yield dispersion accelerates? Explore the full insight for detailed analysis.