For European investors, however, the road ahead remains rocky as political risks show few signs of abating. Against this backdrop, corporate bonds may provide a buffer against these headwinds. A valuable ballast to riskier assets, they provide impressive risk/reward benefits. At Generali Investments, we believe that increasing duration or moving sharply down the rating spectrum will no longer be effective as those solutions will com- promise the robustness of the portfolio in the long run, exposing it to unwanted tail risk.

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