Overview
In 2025, the iBoxx EUR High Yield Capped cum-crossover (hereafter referred to as the iBoxx EUR High Yield) delivered positive full-year performance despite periodic volatility and market repricing. Performance was largely income driven, supported by elevated yields at the beginning of the year and a moderate spread compression through 2025. Although credit spreads widened sharply in April due to heightened tariff-related uncertainty, spreads retracted and ended the year within multi-year historical ranges.
Index performance varied across maturities, ratings and sectors, highlighting the role of index composition in shaping results. Yield and spread dynamics remained the primary drivers of return dispersion, while sector-level developments, most notably the reduction in Core Financials weight, introduced sector composition changes within the iBoxx EUR High Yield over the year. The rating composition remained broadly stable, with only modest shifts across segments rated B, CCC and below.
The broad iBoxx EUR High Yield gained 5.2% in 2025. During March and early April, heightened uncertainty around tariffs and potential global trade disruptions triggered market repricing, leading to a temporary drawdown in the iBoxx EUR High Yield Indices. This decline was followed by a period of stabilization, as spreads retraced and performance recovered starting in the second half of April. Beyond price movements, coupon income contributed to total returns over the year, helping to offset interim drawdowns and support positive full-year outcomes.
Key iBoxx EUR High Yield Indices Performance
The iBoxx EUR High Yield Indices delivered broadly positive one-year performance across most segments, with outcomes varying by rating, maturity and sector. In 2025, higher-rated segments performed better—the iBoxx EUR High Yield BB gained 5.5%, broadly in line with the B rated segment, which also posted a positive full-year performance. In contrast, CCC rated bonds posted a small loss in 2025 and exhibited greater volatility across periods.
In 2025, the iBoxx EUR High Yield 1–5 gained 5.4%, outperforming the longer-dated iBoxx EUR High Yield 5–10, which was up 4.6%.
At the sector level, Energy and Real Estate recorded the strongest performance in 2025. Sector performance also diverged over longer horizons, with both sectors posting comparatively strong three-year annualized performance, while five-year outcomes varied more meaningfully across sectors, reflecting differing sector-specific cycles and market conditions.
