High yield debt offers most potential

It is hardly an exaggeration to state that the new millennium starts on a subdued note for bonds. In contrast, 12 months ago sentiment was generally positive, reflecting the impact of an outstanding year during which Western government stocks acquired safe haven status, with gilt yields tumbling to levels last seen in the 1950s. That backward-looking consensus has, with a few exceptions, failed to serve investors well in 1999. Now the pendulum has swung to the other extreme. With 2000 set to be a strong year for global growth and central banks likely to respond by increasing interest rate...