Flexibility and balance is crucial in today's bond markets

For those investors seeking in the region of cash +2% returns and low levels of overall risk, the current market environment poses several challenges - such as the historically low yields and high valuations.

We do not believe there is a single fixed income sub-asset class that can ensure attractive returns with an overall low level of risk over the next year or two. What is therefore important is to identify and combine fixed income assets capable of smoothly navigating through bouts of volatility. The ability to be both flexible and balanced is crucial. The temptation of strongly tilting fixed income portfolios towards consensus macro and market scenarios, hence heavily overweighting a particular fixed income sub-asset class, could have a severe impact on performance should the unforeseen o...