With inflation and growth slowing, and a rate-cutting cycle on the horizon, the opportunity cost of staying in cash has risen. While bonds have become more attractive from a cyclical perspective, structural risks—such as the potential for persistent inflation—remain.
This makes shorter-term holdings, particularly those with increased duration, vulnerable to capital drawdown. Ellie and Jason highlight the importance of a nimble investment approach to managing these risks, including diversification beyond traditional markets. Ultimately, hedging and employing flexible, differentiated strategies are essential to managing duration risk and achieving better outcomes in an uncertain economic environment.
