Choose bonds with the highest income
Bonds are deservedly considered a more reliable investment instrument compared to shares, as they are among the first to be paid off when debt obligations are repaid.
Bondholders receive fixed coupon payments and also receive their entire investment back by the maturity date.
Unlike dividends on shares, payments on bonds are mandatory and do not depend on the amount of profit earned by the company or on the decision of the board of directors.
However, bonds also come in different varieties. Government securities are considered the most reliable, but their yield rarely exceeds 2.5–3% per annum.
You can earn much more on corporate bonds, especially when it comes to companies with moderate or high risk. These securities can yield up to 7–9% per year, especially when considering companies not only from the US but also from Europe and Asia.
Of course, high yields always come with risk. Therefore, when choosing bonds, it's important to consider the issuer's rating, the liquidity of the issue, the current price, the term to maturity, and the company's actual solvency.
Finding the right balance between income and reliability is the investor's primary task, and that's what we'll try to do today.
10 Bonds with the Highest Yields (US, Europe, Asia)
| # | Bond | Coupon% | Price | Profitability % | Risk |
|---|---|---|---|---|---|
| 1 | Pfizer 7.2% 2039 (USA) | 7.20 | 117.87 | 5.44 | High |
| 2 | Occidental Petroleum 6.625% 2030 (USA) | 6.625 | 102.50 | 6.35 | High |
| 3 | Ford Motor Credit 6.375% 2028 (USA) | 6.375 | 101.10 | 6.15 | Medium-High |
| 4 | AT&T 5.85% 2034 (USA) | 5.85 | 98.20 | 6.00 | Average |
| 5 | Renault 5.625% 2028 (France) | 5.625 | 99.10 | 5.65 | Average |
| 6 | Banco Santander AT1 7.0% perp (Spain) | 7.00 | 100.00 | 7.00 | High |
| 7 | Skechers Euro 2029 8.625% (Czech Republic) | 8.625 | 100.00 | 8.63 | High |
| 8 | China Telecom 4.95% 2029 (China) | 4.95 | 98.50 | 5.10 | Average |
| 9 | Tabula Haitong Asia HY ETF (USD) | — | 100.00 | 8.52 | High |
| 10 | Mangrove LuxCo Sr Sec 7% 2029 (Luxembourg) | 7.00 | 101.00 | 7.00 | Medium-High |
Brief description of companies
Pfizer is an international pharmaceutical giant with stable revenues, especially after the release of vaccines. Pharmaceutical companies maintain profitability even during a crisis.
Occidental Petroleum is one of the largest independent oil and gas companies in the United States.
Ford Motor Credit is the financial services arm of the Ford Motor Company, which issues debt securities.
AT&T is one of the oldest and largest telecommunications operators in the United States, focused on the domestic market, and therefore not susceptible to the influence of trade wars.
Renault is a French car manufacturer that is recovering from the crisis years.
Banco Santander is a Spanish bank that issues AT1 bonds with increased risk.
Skechers Euro (Czech Republic) is a highly profitable subsidiary of the international footwear manufacturer.
China Telecom is China's leading telecom operator, operating stably and with high profitability.
Tabula Haitong Asia HY ETF is a fund that invests in Asian high-yield securities with dollar yields.
Mangrove LuxCo is a European company issuing covered bonds in euros, offering 7% per annum.
As you can see, high-yield bonds can be found not only in the US, but also in European and Asian markets. The yield on these securities easily exceeds 6-7% per annum, especially when considering subordinated, high-yield, or equity-backed structures. The key is to assess the level of risk and not chase figures without analysis.
An optimal portfolio might include two to three such securities with yields above 7%, supplemented by more reliable bonds with yields of 5–6%. This will help achieve a good balance between profitability and investment sustainability.
In addition, bonds, like stocks, can also rise in price, which will bring additional profit if you sell them at the right time.
