RLAM's Greetham: Over-reaching for yield is dangerous in a world of rising rates

Trevor Greetham, head of multi asset at Royal London Asset Management, argues many investors are unwittingly heading into higher-risk assets as the hunt for yield continues

The low interest rates and annuity rates of recent years have triggered the launch of a proliferation of multi-asset income funds investing, often somewhat indiscriminately, in any asset class offering a high enough yield to pass muster. Neither these funds nor, in many cases, the managers that run them have been tested in a proper market downturn or a period of rising interest rates such as the one we expect to start later this year.  High income levels are associated with high risk of capital loss. Drawdown facilities that allow you to cash in fund units mean you do not need to inve...