The dangers of 'end-of-cycle excesses'

Investors still appear willing to take risk, but this remains a very unloved equity market rally - led by defensive sectors such as consumer staples and utilities, writes Erik Knutzen, chief investment officer—multi-asset class at Neuberger Berman.

High-yield bonds and emerging market debt have also fared extremely well this year. When government bond yields and growth expectations are so low, and there is fear about market volatility, investors willing to take on risk in search of return may have a bias to income rather than solely capital appreciation. Investing this way is understandable. For investors willing to move further out on the risk-return spectrum, there are some attractive alternative sources of yield outside of lower-risk traditional fixed income. About two-thirds of S&P 500 index stocks offer a higher yield than ...