Global growth remains lacklustre and the outlook for inflation highly uncertain. As a result, central banks are continuously looking at the effectiveness of their monetary policy and how to sustain the economic recovery. This has resulted in government bonds losing their income-generating qualities, with investors having no choice but to look elsewhere. Unconstrained credit strategies typically offer a higher yield, while furnishing defensive qualities via risk management using several different credit asset classes. The strategy seeks to provide a strong income element on a consistent basis that few other assets can provide. An investor must also consider the security of that income. If, for example, income generation relies on equity dividends, there is a risk that these could be deferred in the case of a bad year or poor outlook for the firm. The coupon of debt securities is, on the other hand, predetermined.

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