"The UK is likely to experience a snail's pace level of growth for a few years, with interest rates unlikely to rise anytime soon," he said. "In this sort of environment, high yield bonds are attractive to investors given the yield uplift they offer compared to government and corporate bonds."
The UK economy grew by just 0.2 per cent in the first quarter of 2011 according to the latest figures from the Office for National Statistics.
With slow growth, high inflation and pay freezes, companies that rely on the confidence of the UK consumer are likely to struggle.
However, Reed believes that high yield bonds can still deliver attractive yields.
"Many are issued by companies not reliant on strong domestic growth as they operate in fast-growing markets elsewhere in the world or they offer goods and services not dependent on consumer spending," he explained.
According to data from FE Analytics, Aberdeen High Yield Bond has lost investors 2.8 per cent since it was launched in March. This is compared with a loss of 0.6 per cent from the sector average over the period.
Performance of fund vs sector since launch
Source: FE Analytics
Reed has highlighted some examples of fast-growing companies that are positioned to benefit from the challenging economic environment.
"One bond we like is issued by Edcon, which is the leading clothing, footwear and textiles retailing group in southern Africa."
"The company has grown from opening its first store in 1929, to 10 retail brands trading in more than 1,000 stores in South Africa, Botswana, Namibia, Swaziland and Lesotho. It currently offers a yield of around 10 per cent and is scheduled to be repaid in 2015."
"Another bond we hold is issued by Boparan, which is the leading supplier of poultry to Tesco and recently bought Northern Foods, makers of Fox’s biscuits and San Marco pizzas among other things. The business should continue to benefit from food-price inflation and the bonds yield over 10 per cent."