High Yield- Buyer Beware

The chart below is from a July 24, 2017 Goldman Sachs report (GOAL Kickstart: Emerging worries about EM outperformance) and it  shows the current yield on various asset classes.  As anyone with a savings account knows, it is hard to find anything with good yield.  The high yield market in particular (highlighted with a red box) is showing extremely low yields compared to the past 10 years.  US High Yield (or maybe moderate yield) is currently yielding 6.0% which is in the 3rd percentile.  This means that 97% of the time over the past 10 years US High Yield had a higher yield.  European High Yield is currently at 3.3% which puts it in the 0% percentile meaning it has never been this low.  It surprises me that these yields are so low given that the US Federal Reserve has been clear in their intentions to tighten monetary policy and it is likely that the ECB is not far behind them.  Buyer beware.  In our asset allocation models we have sold out of nearly all of our high yield exposure.