US high yield bonds are favored due to being more domestic-focused and exposed to US economic activity. Potential Trump policies such as lower corporate tax rates and protectionist measures make them attractive.
High-yield US companies, excluding financials, mostly derive revenues domestically, compared to high-grade companies. This trend coupled with potential tariff benefits attracts investors to US junk market.
US industrials, especially those involved in manufacturing or spare parts, are targeted by some high-yield portfolio managers due to anticipated business-friendly government policies.
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