It is not just this huge variety of choice, however, that makes a diversified multi-asset portfolio a strong choice for income. The flexibility of these portfolios means managers are not forced to invest in asset classes where the risk-reward trade off looks unattractive. If for example US high yield starts looking overvalued a manager could remove the exposure and switch to something more attractive. An unconstrained remit allows these portfolios to be positioned for long term themes and trends, whilst allowing them to be nimble enough to adapt to unexpected market events if necessary.
As global growth continues to decline, with China having posted its slowest annual expansion since 1990, sources of sustainable income will continue to be sought after, and the benefits of a globally, diversified and uncorrelated portfolio will become ever more apparent.
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