These so-called ‘bond proxies’ have in recent years attracted investors who have been pushed up the risk spectrum in search of yield as other sources of income have dried up.

Many of these investors would have traditionally been comfortable sticking with fixed income securities, but with interest rates languishing at record low levels, they have put their money into higher yielding equities, earning themselves the name “bond tourists” or “bond refugees”.

The definition of a bond proxy is difficult to pinpoint. Sectors such as utilities and consumer staples, which tend to be less affected by the ups and downs of the economy, are often assigned bond proxy status.

However, it is too simplistic to apply this umbrella term to entire sectors. It comes down to individual companies.

According to David Coombs, head of multi-asset investments for Rathbone Unit Trust Management, bond proxies are mature, ex-growth companies – so firms that have experienced substantial growth in the past – and have high dividend pay-out ratios.

Examples include Unilever, British American Tobacco and Severn Trent.

The popularity of bond proxies has pushed valuations up such that they are now starting to look expensive.

The fear is that when interest rates begin their ascent, the relative attraction of these shares will decline compared with actual bonds and cash.

If this happens, investors could be less willing to pay such rich valuations and share prices may fall.

While, the logic of this argument is reasonable, in practice things may turn out differently.

Crucially, we know from Bank of England governor Mark Carney that when interest rates do rise, they will increase slowly and steadily.

“In such an environment bond proxies will continue to be attractive because the yields they provide will remain well above those on offer by many bonds,” says Tom Stevenson, investment director at Fidelity Personal Investing.

“High yielding shares will also seem relatively attractive because of the tendency of strong companies to raise their dividends consistently year after year.”

Diageo is an example of a bond proxy which has steadily increased its dividend from 40.4p in 2011 to 43.5p in 2012, 47.4p in 2013, 51.7p in 2014 and 56.4p in 2015.

Renowned investor Neil Woodford has argued that bond proxies will remain attractive as long as they can continue to grow their dividends over the long-term.

He cites BAE Systems which has a dividend yield that exceeds that on the company’s own 10 year corporate bond.

Woodford says that if BAE grows its dividend at 5% a year it will yield 6.1% when its 10-year bond, with a 3.8% coupon, matures.

Despite concern about their vulnerability in the face of interest rate rises, Coombs predicts bond proxies could in fact do well over the next 12-18 months if rate rises are slow.

However, there are a number of triggers where they would stop looking attractive, he says.

These include strong inflation data, if Congress rejected the Iranian deal and oil prices rose as a result, or if sterling collapsed.

His message to investors is to be cautious.

Most investors, he says, are currently anti-long duration in fixed income and as bond proxies are in essence undated bonds, they are a similar bet and could become very volatile when rates rise to a certain point.

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