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Animal Spirits Podcast

Talk Your Book: Balancing Risk and Yield

Sep 2, 2024
Join Priya Misra, a savvy portfolio manager for the JPMorgan Core Plus Bond ETF, as she unpacks the surge in private credit popularity and today's corporate bond spreads. Discover what a soft landing means for interest rates, along with insights into high-quality names in high yield. Misra emphasizes the balance of risk and yield in portfolio management, exploring the active strategies needed in the current climate of fluctuating rates. Get ready for a deep dive into navigating the evolving landscape of fixed income investments!
36:15

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Podcast summary created with Snipd AI

Quick takeaways

  • The current bond market presents unique opportunities for investors, primarily driven by anticipated Federal Reserve rate cuts and favorable yields.
  • Effective fixed income portfolio construction requires a diversified approach to risk management, considering both macroeconomic factors and potential economic scenarios.

Deep dives

Current Opportunities in the Bond Market

The bond market is presenting unique opportunities, primarily due to the current interest rate environment. As the market anticipates potential Federal Reserve rate cuts, bonds with decent yields become attractive, especially in scenarios where the Fed moves to lower rates to stabilize the economy. Even in the case of a hard landing or recession, higher starting yields could lead to a favorable position for bondholders, as falling rates would generate additional gains. This situation marks a shift from previous years, where negative real yields made fixed income less appealing.

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