Is it time to move out of hybrids?

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Riskier investing has been well and truly back 'on' over the past few months, but what has fundamentally changed? I would argue not much, so perhaps it is time to take some risk off the table, move up the credit curve, and come back when things look a little more favourable.

The last two months have seen a definite trading move to riskier investments. Investors have moved down the capital structure and bought heavily into equities and higher-risk credit, including hybrids, in a search for yield. This has helped drive the ASX200 up 13.4% from its lows in June to the end of October. Similarly, some of the higher risk listed hybrids like Seven Group Holdings (ASX:SVWPA) and Multiplex Sites (ASX:MXUPA) have appreciated by 12.3% and 9.45% over the same period.

But have any of the fundamental risk factors present in the market over this period disappeared?

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