He adds the focus should be on companies that are "trading down" or else on the luxury goods companies, as growth is going to be scarce.
Fahad Hassan, chief investment officer at Albemarle Street Partners, says the other factor to consider with high-yield bonds for income is that, even in cases where the bond holder defaults, historically investors have been able to recover about half of their capital.
When it comes to asset allocation within an income portfolio, Klempster says the time horizon of the client is what matters.
If clients are to spend, for example, 30 years in retirement, then that becomes their time horizon and probably enables them to take more risk.
He says such a time horizon is a relatively new phenomenon for clients with an income perspective, and that may mean the historic assumptions around asset allocation can change.
He says the key to markets in the years to come will be an understanding that inflation and interest rates are now returning to normal levels, and it was the previous decade that was the outlier.
david.thorpe@ft.com
