High yield versus investment grade

I think starting out, the experience in terms of the day to day will be very similar but the HY role would give you better exposure to “credit” work. This opens more doors to more lucrative exit opps across various types of alternative credit strategies/funds, which are the higher paying opportunities, but at the junior level the comp difference will be de minimis. 

In terms of the analysis, in HY you focus more on credit technicals. I.e. where in the cap structure do you see value, what do the covenants imply, and focus more on the downside. You also likely will deal with some restructurings/stressed situations so you get some level of exposure to understanding that process and how to drive value. As for IG, I’d say it is more driven by the market dynamics and industry knowledge. You focus more on relative value, where along the curve to invest, more active in terms of trading in the secondary, and focusing a lot more on upgrade/downgrade stories.

I will say that as someone who works in HY, atleast when looking at the LO side I think the difference is overstated when you look at the career overall. The notion that you make significantly more and that the work is much more interesting doesn’t really hold up. HY people tend to be less sector experts and more credit heavy, IG is vice versa. At a large AM the comp differential is smaller (if at all) and is usually offset by having a slightly better lifestyle in IG.

So for a junior, might make sense to go HY if you want to open more doors and learn the technical side, but if you really want to learn an industry and have a better lifestyle than maybe consider IG. FWIW if you end up changing your mind it is not that difficult to change between the two of you aren’t too senior, especially if you are going from HY to IG. Also plenty of funds have their analysts cover both IG/HY for their given sectors, but it is not as common.