JPM Multi-Asset Income fund has started to take some profit from high yield bonds, not because of anything wrong with the asset class but, but because the managers are seeing more opportunities in equity income and are worried about the money pouring into high yield.
Ms Mayell says: “It has become a busy trade and a lot of people have gone in and you do not want a lot of concentration in your portfolio.”
Those looking at diversifying their fixed income portfolio might also want to consider emerging market debt as it can offer a good yield, but that has also dropped as money has poured into the asset class.
But that is the case with income everywhere, from government bonds to quality equity income, all areas perceived to be paying a good income are being snapped up and becoming expensive.
The consensus among multi-asset managers is that equity income holds the most opportunities, thanks to their ability to grow their dividends over time and, if the market recovery continues, the better total return should make up for the income being only around 4 per cent.
