It is not necessarily the best tactic to just buy the highest-rated bonds

Expect government bond yields to rise

As we are all aware, following nearly a decade of loose money bidding up the price of nearly all assets, long-term government bond yields are currently very low from a historical perspective.

Corporate bonds do offer somewhat higher yields and while credit spreads are higher than they were in the run up to the financial crisis they are currently at or close to post-crisis tights. Therefore, the current prospective income return for fixed income investors is low. Often the temptation for investors in the low yield environment is to go down the credit spectrum, or search in ever more exotic corners of the globe for extra yield. Three yield opportunities in fixed income We would caution against this and believe investors need to be patient - better opportunities are lik...