High yield can prove an attractive proposition for fixed income investors in rising, low-interest rate environments, because the asset class has a lower duration and higher yield to worst compared with government bonds. The trade-off is, of course, default risk.
Since the European economic cycle is younger in its maturity compared with the US, this could provide a reason to favour the European market at this point.
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Nandini Ramakrishnan is a global market strategist at JPMorgan Asset Management
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