With quantitative easing on the cards, Europe's already low interest rates are set to fall further, but some fund managers believe the continent will offer the best bond returns.
"It's not so much that the higher the yield, the higher the total return," Todd Youngberg, global head of credit at Aviva Investors, told CNBC. "Lower-yielding Europe [high-yield credit] will outperform the higher-yielding U.S. and Asian markets."
He expects U.S. high-yield bonds will face headwinds not just from expectations the U.S. Federal Reserve will tighten policy this year, but also because of the segment's high weighting toward the energy sector, which has tumbled amid oil's price plunge since mid-2014.
Around 14 percent of the holdings of the iShares iBoxx high-yield ETF, which tracks the Markit iBoxx index, are in the oil and gas industries. Oil prices have plunged more than 50 percent since mid-2014, dropping to their lowest levels since 2009.
Youngberg doesn't expect Asia high-yield will fare much better than its U.S. counterpart, with sentiment "quite poor" after China property developer Kaisa missed a bond coupon payment earlier this month.
Yields in Europe may already be plumbing record lows, but they may slip even further if the European Central Bank (ECB) unveils a bond purchasing program, known as quantitative easing (QE), at its meeting Thursday, as is widely expected. Bond prices move inversely to yields.