UBS's Falconio, Columbia Threadneedle's Al-Hussainy on Duration

The video discusses strategies related to the yield curve, focusing on interest rate risk and duration management. It highlights the importance of understanding the velocity of interest rate changes and their impact on investment strategies. The discussion also covers valuation points relative to cash and risk assets, emphasizing the attractiveness of stepping out onto the curve. The video concludes with an outlook on the long-term yield curve, considering fiscal risks and potential interest rate levels.

What is the current strategy regarding duration in the yield curve?

• Taking on duration around the ten-year area

• Focusing on short-term yields only

• Taking on duration around the five-year area

• Avoiding any duration risk

What has been the impact of recent interest rate changes?

• An 80-85 basis point rise in 10-year yields

• A decrease in 10-year yields

• Stability in real yields

• A decrease in interest rate risk

Why is stepping out onto the curve becoming more attractive?

• Due to decreasing fiscal risks

• Because cash returns are increasing

• Due to the steepening of the curve

• Because credit spreads are widening

What are the concerns when dealing with the long end of the yield curve?

• Decreasing interest rates

• Fiscal risks and labor market concerns

• Increasing inflation rates

• Stable credit spreads

What is the predicted range for the 10-year yield in the long run?

• Below 3%

• Between 4% and 5%

• Sub 4%, around 3.5% to 4%

• Above 5%