High Yield Bonds Singapore: What Singapore Investors Need to Know
For informational purposes only. Not financial advice.
High yield bonds in Singapore are corporate debt instruments rated below investment grade (below BBB- by S&P) that offer higher coupon rates to compensate for greater default risk. Singapore retail investors can access them via SGX’s bond market, unit trusts, or fixed income ETFs.
What Makes a Bond “High Yield”?
High yield (HY) bonds — also called “junk bonds” — are rated below BBB- (S&P) or Baa3 (Moody’s) by credit rating agencies. The higher coupon rates offered by HY issuers compensate investors for greater default risk compared to investment-grade bonds. Spreads over risk-free rates (like US Treasuries or SGS bonds) reflect market-perceived default probability.
In Singapore, most individual retail investors access HY bonds indirectly through unit trusts or ETFs rather than purchasing individual bonds directly. Direct bond purchase typically requires a minimum investment of S$200,000 for institutional-grade bonds, putting most individual issues out of reach for retail investors.
How to Access High Yield Bonds in Singapore
Options include: (1) SGX-listed retail bonds — some SGX-listed corporate bonds (e.g. Temasek-linked company bonds, selected S-REIT bonds) are accessible at lot sizes of S$1,000; (2) Unit trusts — fixed income funds with HY exposure offered by fund managers via banks and platforms like Endowus or Syfe; (3) Bond ETFs — ETFs with HY credit exposure listed on SGX or offshore; (4) CPF/SRS — some approved fixed income unit trusts accessible via CPFIS or SRS.
High Yield Bonds vs S-REITs: Risk/Return Comparison
Both HY bonds and S-REITs offer higher yields than risk-free rates, but with different risk profiles. S-REITs offer equity-like upside and downside with real asset backing. HY bonds offer fixed income with defined maturity and seniority over equity, but with credit/default risk. In Singapore’s 2026 market, S-REITs yield 5–7% while HY bond funds may yield 6–8%, but with different risk-return characteristics that suit different portfolio roles.
Related: Singapore Savings Bonds, T-Bills, Glossary, Calculators.
Frequently Asked Questions
What are high yield bonds in Singapore?
High yield bonds in Singapore are corporate debt instruments rated below investment grade (below BBB- by S&P) that offer higher coupon rates to compensate for greater default risk. Singapore retail investors can access them via SGX’s bond market, unit trusts, or fixed income ETFs.
Can Singapore retail investors buy high yield bonds directly?
Most corporate bonds in Singapore require minimum investments of S$200,000+, putting them out of reach for retail investors. However, some SGX-listed retail bonds are accessible at S$1,000 minimum. For broad HY bond exposure, most retail investors use unit trusts or ETFs via platforms like Endowus, Syfe, or FSMOne.
What is the difference between investment grade and high yield bonds?
Investment grade bonds are rated BBB- or above by S&P (or Baa3 by Moody’s) and carry lower default risk and lower yields. High yield (sub-investment grade) bonds offer higher coupons to compensate for greater default risk. In Singapore, MAS-regulated bond funds must disclose their credit quality breakdown.
How do high yield bonds compare to S-REITs for income?
Both offer yields above risk-free rates, but with different structures. HY bonds have defined maturities and senior claims over equity in liquidation, while S-REITs offer potentially growing distributions but with equity-like capital risk. HY bond income is contractual (as long as the issuer doesn’t default); REIT distributions can be cut if income falls.
Are high yield bonds eligible for CPF or SRS investment in Singapore?
Some fixed income unit trusts with HY bond exposure are approved for CPFIS (CPF Investment Scheme) investment. Check the CPF Board’s approved investment products list. All unit trusts are generally eligible for SRS investment. Individual bonds are not eligible for CPFIS unless specifically listed as approved CPF investment products.