risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Credit risk, Counterparty risk and Risks linked to the use of derivatives and financial techniques.

glossary.

Liquid Global High Yield

Unlocking the benefits of global high yield bonds by using credit derivatives and treasuries to improve liquidity, lower costs and enhance return potential.

A systematic, benchmark-aware high yield strategy that uses credit default swap (CDS) indices and treasuries to offer a more liquid and efficient alternative to traditional global high yield bond strategies.

speak to an expert

5-10 x

lower transaction costs on average in CDS indices than traditional high yield bonds¹

2.5 x

larger trading volumes in the CDS index than the entire bond universe²

50%

higher Sharpe ratio than the high yield benchmark since 2005³

why high yield bonds?

1

Spread and carry
High yield bonds can provide an attractive spread over government bonds and investment grade credit, offering investors the potential to generate returns through both carry and credit risk premia

2

Source of income
With higher coupon payments than many traditional fixed income assets, high yield bonds can offer a diversified and resilient income stream across market cycles

3

Strong long-term return potential
Over the long term, high yield bonds have delivered competitive risk-adjusted returns⁴, supported by a combination of income generation and capital appreciation.

why invest?

Seeking to enhance performance by addressing liquidity and cost drawbacks in global high yield bonds

captures high yield more efficiently
Combines diversified CDS indices and high-quality, liquid treasuries to access high yield risk premia more efficiently

deeper liquidity
To overcome poor liquidity in high yield cash bonds, we use CDS indices, whose trading volumes exceed the cash bond universe. This enables efficient investment and liquidation, even in stressed environments

lower costs
CDS index transaction costs are ~10 times lower than high yield cash bonds⁵, minimising entry and exit fees. Our systematic framework enables highly competitive fees versus passive and active peers

benchmark-aware
Maintains credit and rates exposures broadly in line with the benchmark

seeks excess returns from basis
The basis between cash bonds and CDS indices has historically delivered an annualised premium of about 1.5% above the benchmark since 2005, with 50% higher Sharpe ratios than high yield⁶. Our strategy captures this structural source of potential return that is unavailable to most other active or passive high yield portfolios

robust risk management
Tail-risk protection is designed to reduce drawdowns and help preserve capital during periods of severe market stress

why us?

Quantitative track record
A proven track record of managing quantitative strategies and generating alpha, built on more than 15 years of systematic research on cash bond market inefficiencies

Systematic expertise
LOIM manages more than CHF 6.5 billion in strategies that make systematic use of credit derivatives⁷

Experience and stability
Key investment team members have more than 80 years of combined market experience, including more than 10 years of trading credit derivatives⁸

A history of innovation
A heritage of innovation in specialised fixed income, spanning decades of experience in BBB-BB crossover and Fallen Angels investing, alongside proprietary climate integration in TargetNetZero fixed income.

speak to an expert

sources.

[1] Source: LOIM, Bloomberg indices.

[2] Source: LOIM, FINRA TRACE, Bloomberg, Barclays. Past performance is not a guarantee of future results. Refers to trading volumes in March 2026 for the CDX.HY or CDX North American High Yield Index.

[3] Source: LOIM; Bloomberg indices. We combine the unfunded returns of CDS indices with funded mirror swap indices that replicate the rate exposure of the relevant benchmark. These are based on external published benchmarks. Past performance is not a guarantee of future results.

[4] Past performance is not a reliable indicator of future returns.

[5] Source: LOIM analysis, FINRA TRACE, Bloomberg, Barclays. Past performance is not a guarantee of future results.

[6] Source: LOIM; Bloomberg indices; For illustrative purposes only. Past performance is not a guarantee of future results. Global HY LCS is a weighted average of US HY LCS and EUR HY LCS with weights equal to their respective weights in the Global HY corporate benchmark. Each single currency strategy combines the unfunded returns of CDS indices with funded mirror swap indices that replicate the rate exposure of the relevant benchmark. These are based on externally published CDS index benchmarks. Bond benchmark used is the Bloomberg Global High-Yield Corporate index: Ticker LG50TRUH Index.

[7] As at September 2026.

[8] Source: LOIM. As at September 2026.

find out more about our Liquid Global High Yield fund.

more information

frequently asked questions.

What are global high yield corporate bonds?

Global high yield bonds in this context means fixed income securities issued by companies in the US and Europe that are rated below investment grade. Also known as ‘junk bonds’, they typically offer higher yields than investment grade bonds to compensate investors for taking on additional credit risk. Investors use global high yield bonds to seek attractive income, enhanced carry and potential total returns through exposure to corporate credit markets worldwide.

Why can high yield bonds be illiquid, or hard to trade?

High yield bonds can be less liquid than other fixed income securities because the market is fragmented and trading is typically conducted over the counter through dealers, whose balance-sheet capacity to hold inventory has become more constrained since the Global Financial Crisis in 2008. This can lead to wider bid/ask spreads, particularly during periods of market stress. Liquidity is an important consideration because it can affect how quickly bonds can be bought or sold and influence the costs associated with implementing or exiting investment positions.

What does the ‘basis’ mean between cash bonds and CDS indices?

The basis is the difference in pricing or credit spreads between cash bonds and credit default swap (CDS) indices. This gap can arise due to differences in market liquidity, supply and demand, or investor positioning. Changes in the basis can create investment opportunities.

How do transaction costs affect high yield returns?

Transaction costs, such as bid/ask spreads and trading fees, can have a meaningful impact on high yield bond returns, particularly in less liquid markets. Higher portfolio turnover can increase these costs, while efficient trading and lower implementation costs can help improve potential net returns for investors.

How does a liquid global high yield bonds strategy aim to deliver excess return vs a high yield benchmark?

A liquid global high yield bonds strategy aims to generate excess returns relative to a high yield benchmark through a systematic and disciplined investment process. It seeks to capture opportunities arising from differences between cash bond and CDS markets, while maintaining a robust risk management framework.

other fixed income strategies.

contact us about liquid global high yield.

First name

Please enter your first name.

Last name

Please enter your last name.

Company name

Please enter your company name.

Job title

Please enter your job title.

Corporate email

Please enter a valid corporate email address.

Your message

Please enter your message.

I am not a US resident or Citizen

This field is required.

Your information will be used according to our Privacy Statement

important information.

This document is a Corporate Communication and is intended for Professional Investors only. This document is a Corporate Communication for Professional Investors only and is not a marketing communication related to a fund, an investment product or investment services in your country. This document is not intended to provide investment, tax, accounting, professional or legal advice. This document is issued by Lombard Odier Asset Management (Europe) Limited (hereinafter the “Company”).

More informations

Challenging the investment maze with efficiency, convexity and conviction