Corporate bonds have two value drivers: interest rates and credit spreads. The asset class Interest Rate (Fixed Income, Bonds) is already covered by the government bonds in the asset class “bonds”. In the instrument used here there is only the risk premium of companies less the government bond yield. The invested money is invested in overnight money and serves as collateral for insurance contracts for companies with poor credit ratings. The worse the credit rating, the higher the risk premium; hence higher revenues in the fund, but also the greater the risks eg in a recession.
With the passive asset allocation it has been possible since 2006 to replicate an index of companies with low credit ratings.
In the Asset Allocation Analyzer from 2006 this asset class is shown by a fund (ETF) on the iTraxx Crossover. Previously, as an apprximation, a so-called high-yield fund which invests in high-yield corporate bonds has been used.