Asset Allocation Strategy Amid the Coronavirus Pandemic

The video discusses investment strategies focusing on investment grade credit due to its historically low default rates and the supportive policy environment. It highlights the risk of rating migration, with companies potentially moving from triple B to high yield, and emphasizes the importance of bottom-up research. In equities, the video advises caution, preferring defensive sectors due to the strong market recovery and the impact of COVID-19 policies.

Why does the speaker prefer investment-grade credit at the moment?

• Due to low liquidity

• Because of high returns

• Because of supportive government policies

• Due to high default rates

What is a 'fallen angel' in the context of credit ratings?

• A company upgraded from high yield to investment grade

• A company with stable credit ratings

• A company downgraded from investment grade to high yield

• A company with no credit rating

What approach does the speaker emphasize to manage rating migration risk?

• Top-down market analysis

• Random sampling

• Bottom-up research

• Technical analysis

What is the speaker's stance on equities given the recent market conditions?

• Focus on high-risk sectors

• Cautious with a preference for defensive sectors

• Complete withdrawal from the market

• Aggressive buying

What has contributed to the positive impact on the equity market according to the speaker?

• Rise in unemployment rates

• Slowdown in coronavirus contagion

• Increase in interest rates

• Decrease in government spending