Takeaways from PIMCO’s article on U.S.-led Uncertainty

Main takeaways from the PIMCO article: 

This newfound U.S.-led uncertainty has fueled a sell-off in risk assets and a surge in volatility. Meanwhile, high-quality bonds have flourished, delivering comparable total returns to equities over the past year while offering favorable valuations today. Here are our near-term investment views:

Seek stable sources of return in turbulent times: Historically, starting bond yields closely correlate with five-year forward returns. Yields are attractive today, positioning bonds well in this environment. We believe it’s a good time to reduce concentrated positions in U.S. risk assets, particularly with valuations still elevated.

Diversify across global markets: Global fixed income opportunities remain robust, offering strategies to further enhance diversification.

Favor asset-based finance over corporate credit: We prefer asset-based finance relative to corporate credit across public and private markets.

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