Thanks to consistently accommodating financial conditions, the relatively elevated market valuations of recent months have been able to sideline these uncertainties, benefiting instead from the attractive prospect of a U.S. soft landing AND sizeable Fed rate cuts in the next 12 months. This is also why we believe that cautious security selection and solid structuring are key to the resilient portfolios needed to navigate what on the surface appears to be a favorable equilibrium, but underneath, has notable elements of potential volatility.

Our guiding principles of resilience, optionality, and agility, or “ROA,” will steer us toward achieving our desired returns without committing non-recoverable mistakes. By adhering to our strategy of “planning the trade and trading the plan,” we intend to continue to navigate and leverage market volatility to our advantage, thus providing a better approach to emerging markets.

The evidence of a challenging “last mile” in the advanced countries’ battle against inflation, and the backup in government yields that came with that, did not dent the impressive asset price rally that started last October. Neither did news that Germany, Japan, and the UK had fallen into recession, the tragic prolongation of deadly wars, or the heavy election calendar.