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Investors that traditionally relied on fixed income for diversification were left bruised in Q1 as government bonds buckled under volatility. Is this a sign fixed income assets are no longer useful in a diversified portfolio?

High-yield bonds were particularly affected during the March sell-off, and the asset class is still trading at attractive valuations. At a time when listed companies are cutting dividends, we believe that high yield’s income-generating qualities means that it has the potential to deliver superior risk-adjusted returns earlier on in the market’s recovery.