Preparing Your Portfolio for a Steepening Yield Curve

The video discusses portfolio strategies in the context of current market dynamics, focusing on cyclical trends, risk management, and investment preferences. It highlights the appeal of emerging market equities and credit, while being cautious about developed markets. The approach to FX risk is active, separating equity and currency decisions. The video also covers global bond market dynamics, emphasizing opportunities in emerging markets and the impact of yield curve changes.

What is the primary way the portfolio seeks equity exposure?

• Emerging market equities

• US equities

• European equities

• Developed market equities

How does the portfolio handle FX risk?

• By hedging all currency exposures

• By taking a passive approach

• By avoiding FX risk entirely

• By actively managing currency exposures

What is a potential outcome of global bond sell-offs?

• Increased US equity prices

• Decreased demand for Japanese bonds

• Yield curve steepening in the US and Japan

• Higher inflation rates globally

What has been the impact of Japanese investment flows on emerging markets?

• Decreased investment opportunities

• Increased value creation opportunities

• Lower demand for US Treasurys

• Higher volatility in developed markets

What supports treasury yields globally in the current environment?

• High inflation rates

• Increased government spending

• Scarcity of safe assets

• Strong economic growth