High Yield / Investment Grade

High Yield and Investment Grade are the two halves of the corporate bond credit-quality split, divided at the BBB-/Baa3 rating boundary. Investment grade carries lower default risk and tighter spreads, while high yield (junk) pays more to compensate for elevated risk. The relative performance and spread between the two segments is a sensitive barometer of credit-market stress. See Credit Spread and Money Temperature 101.