Willem Sels (left), UK Head of Investment Strategy at HSBC Private Bank, and Peter Branner, global CIO, SEB Asset Management, argue about the role high yield should play in client portfolios

Investors are pouring into investment grade corporate, high yield and emerging market bonds as they search for regular dividends. But they would be well advised to proceed with caution

High yield funds have had an impressive year so far with investors drawn to their high levels of returns compared to equities and government bondsHigh yield funds have had an impressive year so far with investors drawn to their high levels of returns compared to equities and government bonds

Flows into emerging market bonds remain healthy despite low yields and worrying signs that China’s growth is slowing, but some fear investors will flee these markets if the good times come to an end

The consequences of an unmanaged Greek exit from the euro would be so severe that central banks should continue to support the currency, creating attractive opportunities for credit strategies, according to fixed income specialists ECM

With client confidence at rock bottom, many continue to seek security in government bonds, although corporates offer better yields and may prove a safer bet

Having deleveraged balanced sheets and refinanced themselves on favourable terms, corporates look to be in a healthy state. But slow growth in Europe means investors should favour those with a global reach

However, it is important to address discrepancies within the corporate bond market across countries through a maturity schedule.

Rather than dealing in asset classes, investors should be thinking in terms of categories of risk to protect their portfolios