How investors can update their income strategies

IT HAS been more than a decade since the 2008 financial crisis, yet the main challenge for investors hasn't changed: finding reliable income to compensate for feeble bond yields without taking undue risk.

Large-scale government support to safeguard the financial system after the collapse of Lehman Brothers trapped Western policymakers in a prolonged cycle of low interest rates and high debt. To pile on the pain, recent measures to cushion the economic impact of Covid-19 have extended this cycle.

Suppressed (and in many cases negative) investment-grade bond yields have driven investors into riskier asset classes in search of growth and income, most commonly high-yield bonds and equities.