Bond yields are next to zero nowadays.
What do you think about switching bond part of portfolio to market neutral hedge funds?
They have around 7% absolute returns with bond like volatility and are traded at London Stock Exchange. CFD are also available.
One more advantage is that most of they don't pay dividends and capitalize profits.
Disadvantage is that they are closed end funds and price can be more volatile than NAV.
However, most of them make shares buyback if the price drops below 5% of NAV
This is a list of my favourites:
Bluecrest Allblue Fund Limited
This one is my favourite, it had profits during GFC and has zero correlation to stocks!
6.9% returns in 2014
Third Point Offshore Investors Ltd USD
This long-short hedge fund had historical 17.5% p.a. returns but correlation to stocks is above zero.
BH Global Limited
BH Macro Limited
BlueCrest BlueTrend Limited
Dexion Absolute Limited
I currently stopped investing to bonds and moved 60% of my portfolio to 1:2 leveraged hedge funds.