Antares Fixed Income Manager Dr. Tano Pelosi spoke with Ross Kent, Global Head of Institutional Distribution, NAB Asset Management about increasing volatility that warrants a shift to shorter duration, higher quality bonds. More specifically, Dr. Pelosi also gave his thoughts on the current state of the market and how investors can protect themselves with the proper investment strategies.
Dr. Pelosi hit on the following points:
- More volatility in the market as a result of tightening of financial conditions as a result of withdrawal of Central Bank liquidity
- Banks growing the size of their balance sheets, primarily though bond purchasing–a liquidity affect driving asset valuations
- The tradeoffs between growth and inflation are more pronounced and central banks have less scope for that moving forward
- Inflation moving upward has broader ramifications for risk assets, such as credit
- Rise of geopolitical risks–trade wars are coming into the forefront–more so than they have in the past
- Investors need to think more about liquidity, diversification and cost-effective hedging
- Opportunities to enhance portfolios with inflation protection strategies–longer duration real assets
To watch the full interview, click below:
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