Historically, the high yield asset class has been able to generate high and steady income for investors willing to take on some additional credit risk. These higher coupon payments can help cushion price volatility and mitigate downside risks. Credit or default risk is the primary risk for high yield bonds, and can result in losses due to an issuer’s inability to meet interest payments or to repay the principal sum. For this reason, thorough credit analysis is an important part of an active manager’s process when investing in these securities.