00:00I have to ask you about yields right because even you are so positive stocks in spite of what you
00:04call a fragile world right there are so many challenges out there tariff risks are back
00:09war risks are absolutely back just in the last week the oil process shock obviously as a you
00:15know trickle down from that and we've seen yields pretty much skyrocket right I mean at their highs
00:21of the year and maybe even two years for some parts of the curve and it's not enough to entice
00:26investors back investors seem to be still looking at the AI trade as are you explain to me why that
00:33makes sense yeah so this is really interesting and delicate so I always get a bit nervous heading
00:41into summer because investors want to square their book and liquidity is a bit thinner so these are
00:46the technical factors that could drive market volatility but in the rates space it feels that
00:53it is more than just the technical factors that are driving yields spiking higher and volatility
00:59increasing it feels a little bit more fundamental and it's really the the result of the two
01:05developments that you talked about one is this prolonged supply disruption leading to higher
01:12inflation expectations and higher rates and the other one is AI build out increasing competition
01:18for capital pushing up rates not only nominal rates but also real rates so what we have seen in the
01:26rates yield space feels more fundamental and this is something that we have been talking about for a while
01:33the increasing competition for capital pushing up real yields so that is happening now and and and we
01:41actually think that there may be more to go it's a great place for for income so so so durable
01:47income
01:47is going to be an even more durable theme in portfolio but definitely this is why we have preferred equities
01:53over
01:54government bonds
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