Choose wisely: What the future holds for high yield bonds

In a world of record low interest rates, investors are faced with a diminishing menu of options capable of delivering positive real returns after inflation. Consequently, we are all forced to consider new areas of the market in order to generate higher levels of income for our portfolios. With valuations in high yield bonds at unprecedented levels, we believe investors need to pay close attention to the underlying forces driving these markets and maintain a flexible approach. As prices are not always justified by economic and credit fundamentals, it will become increasingly important to ...