There is much talk in the markets at present about the 'great rotation' from bonds to equities. There is also market chatter about equity income stocks now looking expensive after a good relative run. I suggest both views are misplaced. I expect both portfolios to continue to benefit from their bias towards decent-yielding corporate bonds and equities - the 'Go high' element of the strategy. As a result, both portfolios enjoy yields in excess of what their respective benchmarks would be expected to offer.
Go high
Readers will be aware of the long-term strategy that has guided both portfolios from inception - 'go high, go deep, go east'. Overweight positions in smaller companies and the Far East reflect the second and third strands of the strategy. But market talk of a shift from bonds into equities, after a strong run from bonds in recent decades, and that higher-yielding equities are looking relatively expensive, encourages scrutiny of the first.