Are junk bonds worth the risk?

While interest rate cuts by leading central banks have kept their respective economies afloat, they have added substantial pressure on bond returns, pushing investors to fish for higher yields from riskier assets.

The US Federal Reserve's policy rate now stands at 1.75% to 2%, while yields on three-year and 30-year US Treasuries were trading at 1.58% and 2.25%, respectively, as of Wednesday's close.

With corporate credit spreads at or near record lows and yields at rock bottom, some investors are being tempted into junk bonds, to the extent their mandates allow it. 

Speaking at FundForum Asia last...