As multi-asset investors focused on income generation, we do not think going against global central banks is prudent, and until we see a meaningful turnaround in economic data, our preference for adding to risk is likely to remain for debt over equity securities which we have continued to reduce our exposure to.
We are still seeing attractive valuations in credit markets despite policy-driven spread tightening in recent months, even in corporates with strong balance sheets and cashflows in the US markets. However, we think some of the best opportunities are presenting themselves in Asian markets, and have recently been increasing our exposure to Chinese government bonds, emerging market hard currency debt and Asia high yield. Chinese government bonds showed their defensive qualities during the worst of the selloff in March, while offering an attractive yield pickup over developed market gover...
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