Is it time to sell high yield bonds for equities?

HIGH YIELD

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The recent strong performance of high yield bonds relative to equities may herald a compelling investment opportunity.

The maxim that adversity presents opportunity is one of the oldest in the investment book, yet the current market volatility, created in large part by the deepening eurozone crisis, offers an opportunity for the proverb to ring true. Nervy investors have in the main turned their backs on riskier assets amid the existing uncertainty, but one sector holding up well is high yield bonds. Indeed, while the FTSE 100 has fallen by 10% in the two months since 16 March, the BofA Merrill Lynch High Yield index has dropped just 0.97%. Opportunity knocks? High yield bonds and equities are us...

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