High yield bonds and high dividend equities could provide good returns in the current climate, according to new research.
A study carried out by JP Morgan Asset Management found that, with government bond yields at record lows and the outlook for equities unclear, high yield bonds and high dividend equities, along with convertible bonds, could be an attractive alternative.
Dan Morris, market strategist at the organisation, said high yield debt is offering attractive spreads in comparison to government bonds, so companies should have "little difficulty" in meeting debt repayments.
"In contrast, emerging market debt and investment grade debt are less attractively priced. This may not be enough to compensate for the risks still inherent in emerging markets," he added.
Last week, a survey of UK investors by Morningstar into the appetite, understanding and use of exchange-traded funds found that the majority of professional and individual investors need more information about them.
Posted by James Harrison