How are investors satisfying their need for yield?

Bond investors spent most of last year transitioning towards a more fundamentally driven approach to selecting assets.

After several years of quantitative easing-fuelled gains where central banks were essentially guaranteeing positive returns to fixed income investors, the rate hiking cycle initiated by the US Federal Reserve was all but setting the stage for the resurgence of bottom-up analysis.  Now the largest buyer has deserted financial markets, the merits of sector differentiation have reappeared. This is what we saw until Q4 2018; rates moving higher, above-trend growth and rock solid employment figures.  In this environment, we would expect corporate bonds to outperform sovereigns.  However...