With the appropriate research and portfolio management skills, AllianceBernstein said, emerging markets and Europe can provide higher returns for those investors willing to accept more risk.
AllianceBernstein's global fixed income senior portfolio manager, Jeremy Cunningham, said AllianceBernstein has moved away from corporate bond risk to emerging market sovereign and currency risk in its benchmark-agnostic and high income portfolios.
Mr Cunningham said this is on a “very selective and opportunistic basis”.
“Within our high-yield allocations, we’re leaning slightly away from the US market in favour of Europe, where we regard the financials sector as particularly interesting,” he said.
In terms of interest rates, most investors are concerned about duration or the “sensitivity of bond prices to changes in interest rates”.
“This can be seen from the fact that yield curves are steep, reflecting market expectations that interest rates will rise,” Mr Cunningham said.
“If, like us, you expect rates to rise gradually, however, we think it’s possible to make money from duration, provided you position yourself appropriately on the curve,” he said.
