High-yield bonds, also known as junk bonds, are bonds that are rated below investment grade by credit rating agencies. They are considered to be riskier than investment-grade bonds, but they also offer the potential for higher returns.
There are a number of reasons why investors might choose to buy high-yield bonds. Some investors are attracted to the higher yields that these bonds offer. Others believe that high-yield bonds can provide diversification to their portfolios. And still others believe that high-yield bonds are undervalued and that they have the potential to appreciate in value.