An alternative strategy would be to complement the existing sovereign bond portfolio with higher-quality bonds such as German bunds, particularly (mortgage-backed covered bonds). In such a...

An alternative strategy would be to complement the existing sovereign bond portfolio with higher-quality bonds such as German bunds, particularly (mortgage-backed covered bonds). In such a restructured portfolio, higher-yielding corporate bonds and other emerging markets bonds would exhibit lower volatility owing to greater diversification and enhanced return.