With heightened uncertainty in Washington, Amar Reganti dives into the benefits of a more flexible investing approach.

Hi, I’m John.

And I’m Julie. We’re the hosts of the Hartford Fund’s Human Centric Investing Podcast. Every other week, we’re talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients. Let’s go.

Amar, welcome back to the Human Centric Investing Podcast. We’re so happy to have you here today.

Great to be back. Thanks for having me, Julie.

You know, Amar, it seems like President Trump has been in office for longer than he actually has been at the time of the recording of our podcast, because so much stuff has been going on.

There’s been proposals around tariff talk, and there’s proposals and everybody’s following the Doge stuff. And how do you as a fixed income strategist kind of keep track of which ends up and Where do you think the overall market is these days? I hear a lot of financial professionals just talk about confusion up in the air, wait and see. Like, how do you what’s your view of the world these days? Just a short while into President Trump’s term.

Yeah, I think it’s really important as a markets professional to try to find a little bit more of the signal and all the noise, I guess, to paraphrase something that’s pretty common in statistics. What you’re really trying to understand is not necessarily the rhetoric, except for in the sense, you know, what the rhetoric is trying to communicate about and goals and far more on the actual levers that are being pulled. So, you know, for example, there’s been a substantial amount of talk about tariffs. Well, we also know that some of those tariffs have been postponed while some have actually, you know, gone forward and, you know, it’s very hard to say exactly what the tariff structure will look like in several months, because part of it is, yes, a desire to actually utilize tariffs for a variety of reasons. And then another part of it is also part of the sort of negotiation that the new administration is having with trading partners. So in that sense, I think it’s great. Obviously, you need to be aware of what’s being said, but it’s really important to focus on what actual things are levers are being pulled, whether it’s with tariffs that are implemented or whether it’s with, just as importantly, maybe even more importantly, the budget reconciliation process that’s going on in Congress that’s extremely complicated, that’s sort of governed by a very, very thin majority in the House and, you know, right now appears to have sort of different ideas in the Senate version and the House version. So I don’t view it as like confusion. I view it as like extremely messy policymaking, but that’s not it’s not actually that unusual, you know, in a number of decades. And I mean, looking back over a number of decades, I think probably what’s more challenging is for people to kind of like they hear like a lot of the noise around that and some of the noise, you know, is it can be unsettling to market participants. And because of that, it kind of obfuscates doing a lot of the sort of hard grunt work of looking at what’s actually happening.

Obviously with all that noise, how has the bond market been reacting? Maybe we can kind of start with the big picture and then narrow in on some of the specifics.

So the bond market, I guess the right term is usually is reactive rather than predictive, right? Like sometimes the bond market is in prediction mode where it’s saying, hey, given all the inputs we know about the economy, about inflation, about Fed policy communications, like here is kind of like the path of rates and what we think, you know, inflation is likely to be along with real growth. I actually think your usage of the term reactive is very appropriate because the bond market has been in sort of reaction mode, not just since the inauguration, but really probably since, you know, the summer of 2024 when the probability of not just, you know, President Trump, you know, winning that election, but also the chances of what’s called, you know, the trifecta or the sweep, which is the House, the Senate and the executive branch. And what it’s done is it’s, you know, it’s sort of shown the market at various times has been concerned and especially the last couple of months has shown growing concern about some of the tariff related discussions that have been happening and the possibility of inflation creeping back in at a time when it seems like the cycle had somewhat damped it. Now, of course, it’s really, it’s really hard to say, right? Like, oh, you have to ask what type of tariffs, what are the exemptions? Are there retaliatory tariffs that follow? And all of these things are first, second and third order effects that the bond market right now is having a very hard time grappling with and hence has been reactive mode. Just as a very good example, over that weekend when, you know, it was announced that there was going to be significant tariffs on Canada and Mexico, you know, you saw an upward movement in bond yields and inflation break evens, which is the bond market’s sort of proxy for what inflation is, widened out. And then, of course, on Monday, it was told that those were going to be delayed out, you know, several weeks or a month. And then the bond market, you know, became sort of calmed down. So right now, I think it’s a lot of wait and see on what the end actual policy is on the tariff side. And of course, like the other 800 pound gorilla, which is the budget reconciliation process, the extension of the 2017 tax cuts, how much new additional supply or deficits happening. Like those are the things that the bond market’s kind of in a reactive mood to right now.

So, Amar, when you say reactive, I hear the word react and immediately, I think, volatile, right? Because it seems like, you know, based on what and it’s funny, Julie and I did a podcast with one of our political commentators. I think it was in January prior to the inauguration. And he stressed to us, just be careful. You’re not paying attention to every little tweet or every little sound bite, so on and so forth. Do you think the bond market is kind of adjusting to that? And would you say to investors, you’ve got to be a little bit careful about making kind of snap decisions based on a one day or a one week movement in the market?

Yeah, that’s exactly right. And that’s that’s a little bit of what I alluded to, which is to sort of separate out like the tweets, you know, any kind of like like a lot of rhetoric and actually kind of look at like, well, what are the levers that are that are actually being called here? And that’s like that’s the job of, you know, investors on our side, certainly. But, you know, it’s actually just a good thing, too, if you’re an allocator and your job is to think a little bit more longer term and to really do that. If you’re going to be reactive to every single tweet, which can clearly turn on a dime, just that one weekend is, I think, a really good, a really good kind of proxy. It’s going to be a very expensive time for you during a period of volatility. So what’s kind of best to do is, you know, look at your asset allocation. Look at what your end goals are. Look at what you’re getting paid from a valuation and yield perspective. And I say yield because I come from the bond side. And that is, you know, one of the key drivers of how I think about the world and allocate to that. And, you know, I always say, like, give your managers the flexibility so that we can obviously, you know, people who are studying all of the data coming in at most periods of time, you know, re calibrate risk more from our perspective, more appropriate.

Amar, there has been so much focus on DOGE, the Department of Government Efficiency, and obviously the headlines and the tweets, they’re just never ending. And I’m just curious from your perspective, you know, obviously, there’s so much of the US federal budget that goes to other programs like defense spending. How much of an impact can DOGE really have on reducing federal spending? In your opinion? Yeah.

Yeah. So look, just at the top line, like, you know, before we were speaking, I was just catching up on some old fiscal year and numbers for the federal government as one does want to do. And, you know, if you look at like 2023, for example, like there was like north of like six trillion dollars of of like federal spending that that took place that year. And, you know, over 60 percent of it, the majority of it was for what you call mandatory spending, right? Spending where there’s a formula that Congress has determined, like Social Security, Medicare, Medicaid. And like that formula is like your expenditure, right? That’s what’s going out the door. You can change that legislatively, but it’s a hard lift. And Congress has to go through the sort of messy, you know, business of recalculating things and so on. And like of that 60 percent number, two thirds of that number is Social Security, Medicare, Medicaid, income security, veterans benefits, like stuff that, you know, to change, you literally need to change the formula and the allocation that that Congress is giving it. So, like, and again, that’s possible. But, you know, like that’s not what DOJ is doing. It’s called the Department of Government Efficiency. And I guess the idea is you’re supposed to trim the fat from like spending. So if you go to the other sort of 40 percent, it’s what’s called discretionary spending. And like half of that spending is military. So like the big sort of areas of the federal budget, like the really like big areas are, you know, Medicare, Medicaid, Social Security, defense. And like those are areas that, you know, you really need to think about like things like the procurement process, the compliance process, all things that are sort of very granular on if you want to make like changes or tweaks to it to kind of save money. And by the way, part of that also is like like on the on the the non -discretionary side, the mandatory side, that first chunk I talked about. There’s the formulas as well. So if you’re not like addressing those, it’s actually quite hard to bring down, you know, deficit spending without Congress being extremely active participant. So that’s like the sort of first part. The second part, which I think the courts are going to really have to decide is this concept of impoundment. And what impoundment is, is that and it’s it’s playing out right now in terms of, you know, different interpretations of this of this power is that traditionally, at least since making some before, definitely, which is when the impoundment act was signed into law. Congress, through their Article One powers, appropriates money. And like the executive branch has very little say about how that money is spent. Right. If you think about it, like, you know, they want to spend a hundred million dollars on this program for crops, you know, to deal with a bug. It’s a hundred million dollars. It’s not like there’s any Congress has decided you need to spend a hundred million dollars now. You know, the administration is taking the vein that there’s some things that, you know, you can spend money on and other things that you necessarily can’t. And they’re using what they would call their Article Two powers, which is the take care clause, which is that the executive is supposed to take care to execute the laws effectively. Now, this sort of conflict in terms of the powers of the presidency is going to make its way to the Supreme Court. Like that is like something the judiciary is going to have to decide. I think from a fixed income investing perspective, we right now, once Congress passes laws, we actually have a very good idea. And the CBO, the Congressional Budget Office and the Office of Management, Budget, etc. All these data sources give us very good insight in terms of what spending is going to be like this year and next year and following year. So you have a very good sense of what fiscal policy is going to be like. I think, you know, if there’s a reinterpretation of those powers, fiscal policy becomes a lot more volatile because literally, you know, you can have a change in the presidency and then a whole bunch of like bills may or may not get relitigated, you know, through the use of executive power. So like this is like a big deal. And for the bond market, it’s a big deal, too, in the sense of understanding what you call like how the money is raised and how the money is spent, because federal spending is an extremely large part of the economy. And you really have to have a good sense of what deficits are, not just like the percentage number, but literally how much money is moving out the door on a daily or monthly basis. So, yeah, like that’s kind of what I think the issue that Doge kind of arises versus, you know, what you traditionally think of as like deficit reduction, just on an absolute sense.

You know, Amar, you mentioned deficit spending and certainly spending is something we always talk about on a year by year basis. But I know a lot of the clients of the financial professionals that we work with are really, really spooked and concerned by the level of debt in the country. And I’ll have to admit, for the 30 plus years I’ve been in the business, we’ve always kind of heard the same thing about the debt, like it’s getting to this tipping point. It’s getting insurmountable. It’s going to result in persistent higher and higher interest rates and so on and so forth. And look, when you look at those graphs and things like that, it does scare you. But from a fixed income standpoint, you’re kind of you’ve studied this, you’ve looked at it. How should we be thinking about the deficit in the United States right now? Is it time to push the panic button? Is it within the realms of expectation? Is it not a problem at all? Kind of where where would you say we’re at?

Well, yeah, look, that’s a it’s a big that’s a big and sort of complicated and sprawling question. And everyone wants to give like one sentence answers to it. And the answer is, as in most things, particularly in markets, like there is no straight one sentence answer. So you’re right. You’ve been hearing it for 30 years. Right. Like and, you know, I think the first thing is, is that, you know, we’re a very wealthy country, right? Like you can say there’s, you know, roughly 30 plus trillion dollars, 36 trillion on the liability side of the federal balance sheet. But then, you know, you look at like this year, you know, productivity dynamism of the U .S. economy of like one of the wealthiest nations in the history of like literally of our modern history. And, you know, it’s like, well, like that’s what’s on the asset side. Right. Like it’s not, oh, there’s cash here and there’s bonds here. It’s it’s it’s the the sheer sort of productivity of the U .S. economy. So and I think that’s an important point to make because different countries have different amounts of debt. And, you know, we cite the United States as having a significant amount, but then you could look at the government of Japan and they have twice the amount of government debt. And, you know, from, you know, any visit to Tokyo, which I always recommend to people, it’s a thriving, dynamic place with a high standard of living. And it hasn’t fallen into some kind of black hole because there’s, you know, too much debt. That doesn’t mean there is no number. Right. The right question is, is and this is what I think serious academics, policymakers, market practitioners have to sit down and really think about is what’s the optimal amount of debt. Right. And some people might say zero. And then you’d say, well, well, there’s no Treasury bond market. Is that a good thing? And if you’re pushing that, you might say, oh, yeah, maybe fine. We can live without a Treasury bond market. But that’s that seems strange. You would want to live without a risk, the risk free security that everyone uses public sector, private sector to kind of hedge out portfolios. OK, but let’s say you could live without that. Well, then where do you recirculate these dollars? Right. You know, like you can only put so much in a bank account. The FDIC has like a limit. Right. And so you have to like the work, like, you know, what I call like the sort of planning and thoughtfulness of trying to understand debt dynamics is, well, how much do you want? At what point does it become a problem for your market infrastructure? Right. Like it’s, you know, it becomes harder to trade it and things like that. What’s the right level of Treasury securities that should exist for a country that’s the reserve currency of the world? Right. Like it’s the reserve currency. And the Treasury market is like the other side of that coin. Right. Like if you can imagine the dollar is the reserve currency, the Treasury is the reserve security. So you take all of that and you’re like, that’s all in the national interest to some degree. So what is the right stock of debt? I don’t have that answer. You know, but but it’s it’s like, that’s kind of where the nexus of the debate should be. And then if you think you need a substantial reduction, well, then, you know, it’s going to the rebalancing has to take place either on the revenue side. Right. Or it has to come through the expenditure side or some series of vote. And then if you’re on the expenditure side, well, we just talked about, like, what you call like the white hop third rail. I mean, if that’s the right term for a third rail, like what of sort of American economic management, which is, you know, the Social Security, Medicare programs and then defense, and particularly in an increasingly unstable world. Like, do you that’s all I want to touch defense? I don’t know. Like, that’s something for the public debate. Well, do you want to touch Social Security or Medicare? Oh, well, again, like you have an aging population. Like, do you want to do that? Like, so this is kind of the nexus. The Simpson’s Balls Commission came closest to, you know, I’m not saying I am for or against the recommendations in one way or the other. I’m just saying they attempted to kind of do this. And it never even came up really for a vote. So it tells you that like there wasn’t that appetite. Now, do I look at like like treasury markets right now and say, hey, there’s like a huge problem? Well, the markets themselves don’t say there’s a huge problem brewing. You know, there’s some things that are telling you that, yeah, the supply of treasuries is making things a little bit sludgy is the right word in markets. If I look at something technical called swap spreads like that might be the case. My colleagues talk about something called term premium a lot, which is the additional premium bondholders need when there’s like a lot of bonds out there. But none of those levels are what you consider like particularly extreme. So and then you have you have thoughtfulness and time to work on this and come up with a solution. And remember, in America, like sort of big changes over time usually require a buy in like a societal buy in right over the course of multiple decades so that no one’s just unwinding what the other is doing. And that’s kind of like, you know, how I think the debt sort of dynamic discussion, which is both an economic, a market and societal one needs to sort of take place. Got it. That was a long winded answer. Sorry, but I promise it wasn’t going to be one sentence either.

Yeah, it’s a long winded question. Yeah, absolutely.

So maybe we could shift gears a little bit and think about, you know, if investors want to get an idea of how bonds could perform going forward, what should they be looking at? And I know you just started to touch on that, but maybe we could peel back the layers a little bit and dig into your. Maybe it’s a little bit of a crystal ball moment here.

I’m a look. Look, what bonds are there to help you do is kind of deal with some of the uncertainty that just inherently exists in markets. Bonds are there to be a diversifier when the economy unexpectedly slows down, when there is a recession, when, you know, the animal spirits of risk on all of a sudden make themselves scarce and it’s they’re there to preserve capital. That’s like the first and starting point of what I call the high quality bond market. The second thing that a bond is supposed to do is it’s supposed to pay you some coupon or income. And that’s there for the opportunity cost of, you know, not doing something else, you know, with these bonds. Now, for a number of years, particularly following covid, you know, you were really not getting paid that income. And, you know, but bonds were still an important part of a portfolio allocation. It’s just that the bar to add them was higher, right? Like because you weren’t being paid that income. Well, in the course of like after 2022, there’s almost been like, in my view, a renaissance in in the bond market. It’s almost like a brand new market of surfs from Ford. The yields are attractive and yields are very, very sort of important driver of how you should think about just what we call expected return or, you know, over the intermediate term in markets. And those yields look like attractive. I’m not saying things can’t go wrong. You could have, you know, reigniting of inflation. But we’ve brought out we’ve brought inflation down really significantly from its peak point, you know, just over a year and change ago. And, you know, it’s now, you know, we’re it’s not at the 2 percent target, but it’s it’s much, much closer. So from that perspective, like you have these attractive yields, you have this asset class that’s there to serve as a diversifier during, you know, ideally substantially down equity markets. And to me, like it makes it such a compelling place to think about from an allocation perspective in a way that it certainly was hard to make that argument, you know, to the same sort of vehemence as you were, like, you know, just after COVID.

You know, Amar, one thing that strikes me is that the investing public really has short memories when it comes to, you know, favoring one sector over another. So as an example, we’re coming off of back to back years of 20 percent gains in the S&P 500. And you may have some investors saying, why in the world would I even want to own a bond, right? That the return has been so terrific in equities. And yet I think there’s many financial professionals that say, look, markets kind of exit at the equity markets a little bit expensive right now. We’re near or at all time highs. Sometimes you get that sinking feeling in your stomach, like how long can this go on? But what’s an objective tool that you use to kind of think about the relative attractiveness, the attractiveness of the equity market versus the fixed income market and maybe give me some ammunition for talking to that client who forgot there even is a bond market out there.

Yeah, I mean, I think like one just the one easy kind of place you can kind of look. And it’s simplistic. It’s not perfect. This you can look at the current S &P earnings yield versus like the 10 year treasury rate. And, you know, you’ll find that they’re actually relatively close to each other. And that’s usually not the case, usually for significant periods of time. The 10 year treasury rate is below what the S &P earnings yield has been. And the periods where they sort of meet or the 10 year treasury rate is above that, you know, tends to meet for me, at least, is an indicator that fixed income is an attractive opportunity set relative to the equity market. And again, I’m using the 10 year treasury, like the most vanilla of vanilla bots, right? And that’s that’s not a bond portfolio. A bond portfolio can be more sophisticated than nuanced, like using everything from agency mortgages to investment grade corporate credit. And, you know, if you’re looking for even additional income, like the high yield bond market or the bank loan market, like a number of places. So like so just from a relative value perspective, like I think, like to me, that’s an important signal. It doesn’t mean like, you know, things happen tomorrow or the day after. It just means that, like, if you’re getting your ducks in a row, like at least some signal is showing you that it kind of makes sense to do that. But, you know, let’s say you don’t want you’re like, OK, I get it. I need to think about, you know, some form of capital preservation. I need to think about diversification. And I want to take a little bit of that and put into higher quality bonds fine. The other part that it’s worth thinking about is but I don’t, you know, while like the 10 year is attractive, you know, in that mid four range and maybe a good, good high quality core plus portfolio gets me somewhere in the fives or more and yield, maybe a lot more. Well, OK, that’s what the credit markets are for. Right. And they occupy, in my view, that gray space between the equity markets and the the highest quality fixed income markets. So you’re getting, you know, you know, substantially more yield. Yeah. And there is a little bit more risk. But historically, it’s less volatile than the equity market. So it’s a way of kind of trying to capture some continued upside return. But still, you know, trying to make your overall asset allocation less volatile. And then finally, like there’s the point of like, OK, but I don’t want to have to sort of think about chopping up my bond portfolio like that. Well, this is why you have more flexible mandates. Right. Like if your manager has flexibility, in some cases, they can have a lot of flexibility. They can be in credit or maybe they just want to be in treasuries because that’s the best risk adjusted return they’re seeing. Maybe they want to be in, you know, medium term treasuries or they want to be in slightly shorter dated. And they’re calibrating almost constantly. Excuse me, dry air, you know, what that allocation looks like. And then, of course, because we’re speaking mostly to an American audience, I find that it’s always just worthwhile mentioning there is a bigger world than the United States when it comes to the bond market. And for years, right, it’s something you could ignore because Japanese interest rates were like near zero and European interest rates were like near zero. Well, guess what? Like, they’re not now. You know, those rates have moved up in some cases. In Japan, they’re continuing to move up. In other cases, like in Europe, you know, like they’ve moved up, but they’re coming down a bit. So like there’s now like this diversification that can exist in the bond market that can be very attractive and also lets you take advantage of the fact that some countries economies are slowing and some are still, you know, on sort of like a pretty fast track like the United States is or Japan is. And giving your manager that flexibility, I think just gives you additional tools for us to allocation.

Amar, I know in your monthly commentaries that are posted at HartfordFunds .com and for those that have been reading those and following along, you’ve been highlighting the benefits of a flexible and constrained approach. Is this what you’ve been referring to? And if so, can you maybe dig a little bit deeper and just give a few more examples of this as being an attractive way to invest?

Yeah, look, if you buy, you know, like I always think of something like core bond or core bond pluses, like the meat and potatoes of a bond allocation, right? It’s very straightforward. You know, you you you have you know, the manager has a little flexibility, but it’s not not a huge amount. So like it’s it’s it, you know, portfolios can change a bit. But like really the mandate can be it’s a little bit more constrained. And it’s look, that has served its purpose for for many years. And I still think it will serve a very, very strong purpose. When you’re and you know, when you’re dealing with a world where we’re trying to figure out tariff policy with budget reconciliation, with, you know, what’s happening with conflict in in on a three hour flight from London and growing sort of geopolitical tensions and so on. Well, like some of these things are what you call decelerators of growth. Others, you know, decelerators of growth and inflation. Others are accelerators of growth and inflation and trying to find out like when those, you know, when one policy conflicts with another policy and really understanding what that outcome is. Well, that’s where you really kind of want to give your manager some flexibility, right? So that could mean, you know, for a while, as the U .S. economy really was running hot and, you know, it didn’t necessarily make sense to have a ton of interest rate risk in your portfolio. You could have a little bit and you could still be earning great yields. Now, like the curve is steeper, like it’s shaped in a different way than it was. Well, you might want to move out the curve a little bit. And, you know, there is signs that the economy is not as white hot as it once was. There’s that’s natural. There’s like a unnatural deceleration effect. You know, you could you could still find some parts of the credit market attractive, but not others. And, you know, it’s nice that the manager has that like mandate to kind of find like the more attractive parts of the credit markets and then try to come up with a way of capturing what we call the best parts of that risk premium from our perspective. Or, you know, like they might not find any of it attractive and kind of like shy away from it. So like having that flexibility in a world that to me is probably as dynamic as it’s ever been in my 25 plus years in capital markets, I think is a useful thing. It’s a useful lever. And it’s something that I find it’s not a replacement for all bonds, but it’s a great like addition, right? It’s a great additional set of tools to your fixed income allocation. And to me, I think it’s going to be one of the most dominant ways people will sort of seek to garner like returns from fixed income markets in the coming years.

Well, Amar, I know it’s difficult to pack your crystal ball in your carry on bag when you travel across the country. But this is my favorite part of the podcast, because I’m going to ask you to break it out and I am going to give you and your colleagues credit because, you know, back last year in 2024, when people were talking about continued cuts, I mean, you were among some of the first saying, hey, not so fast. Not sure cuts are going to continue at this pace. But what’s your best case scenario for where you think the Fed is right now and maybe just a long shot prediction through the end of this year? Where do you think they’ll be based on everything we know at this point?

Oh, yeah. So I think a couple of and this is, you know, with no crystal ball in terms of, you know, and tariff regime or exactly what the budget reconciliation are, by the way, which is like saying, ignore the. OK. You know, I’m a little bit more optimistic. I think, you know, there is a chance still of like one cut near the end of the year. I think the ball is I’m sorry. The bar is pretty high for Powell. January effects in inflation tend to be a bit higher relative to the rest of the year. And hence, the January inflation numbers came in a bit hotter than you’d expect. The real sort of challenge, John, I think the sticky part here in inflation is the housing market. Right. And until shelter inflation costs continue to come down or at least the data needs to show that the Fed doesn’t really have as much freedom as as it would want at this part of the cycle. And, you know, we’re seeing a gradually cooling economy. It’s not, you know, I don’t necessarily view one as one of reacceleration. And again, you know, not knowing what what exactly is going to come to the budget reconciliation process. I expect with the debt ceiling and the continuing resolution to try to fund the government, because the government technically could shut down in mid -March. You’ll probably see a few less sort of federal dollars pumped out, at least this year, as, you know, just things get slow walked a bit. And if that’s the case, that’s also probably a little bit cooler on the broader economy. Yeah, like so. So from, you know, the good part of what I just said is you know, it’s very it’s we’re very unlikely, not impossible to have, but unlikely to go through that very high battle of inflation we had in 2022 to 2023. There’s a lot of that was supply train driven and some demand as well. But, you know, a lot of it was the opening, the closing and opening of the world’s largest economies. Like, that’s a little bit less likely. But we have to wait and see on the tariff front because, you know, tariffs could be a one time shift in price or they could be, you know, continuous shift depending on how they’re structured. And then if there’s retaliatory tariffs, like that could feed through. And then, John, like the other thing, of course, is what the reaction function is of the central bank because of view it as a one time move that they look through. And I don’t think any of that has really played out yet. And they’re I think they’re just going to have to await data and and kind of view that. So the crystal ball is foggy. I mean, it but that’s understandable.

Which which also then makes the case for what you just said about an unconstrained unconstrained approach where we’re trusting managers who have their fingers on the pulse to try and figure out where the most appropriate allocations might be.

Yeah, I completely agree with you on that.

Amar, before we wrap up, I would love if you could share maybe two or three talking points with our audience about fixed income that they could use with their clients in their next conversations. I know we covered a lot of territory and we definitely got into the weeds. But what would you say would be some of the high level bullet points that they might be able to turn around and share with clients as they engage in these conversations? Because I know it’s top of mind for everyone these days.

The yields are attractive. And I think that’s just a great starting point to begin a fixed income conversation. Now, longer data yields are higher than most shorter data yields. So the curve is more normally shaped from that period when things were inverted. So I think those are all like things that are are good starting points when you begin a fixed income discussion. And then I think there’s just the continuous reminder that the role of fixed income in your portfolio is to serve as that diversification for an economy that could that could rapidly slow. Or if, you know, the sort of exuberance of the equity markets wears off. Well, you know, you want something that’s going to help protect you, not just from a capital preservation side, but in the meantime, you’re getting income. And then secondly, you’ll get total return if there is that sharp downward movement rates. So to me, like it’s it’s an attractive time to do the homework on fixed income and homework doesn’t sound like a lot of fun. But when you look at like the broader opportunity set and fixed income, at least to a bond geek like me, it is fun. Like there’s a lot of interesting things to look at and spend time on.

Well, Amar, we always appreciate your words of wisdom. And we may come back to you in a few months and ask you to polish up that crystal ball. I especially like though that you gave us and our listeners some things to look for out there in the development of policy and so on and so forth. So on behalf of all of our listeners, thanks for the time that you’ve taken today to educate us about where things stand right now. And we look forward to speaking with you again in the future.

Thank you guys for having me on.

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Investing involves risk, including the possible loss of principal. • Fixed income security risks include credit, liquidity, call, duration, event and interest-rate risk. As interest rates rise, bond prices generally fall. • Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. • Loans can be difficult to value and less liquid than other types of debt instruments; they are also subject to nonpayment, collateral, bankruptcy, default, extension, prepayment and insolvency risks. . • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. • Diversification does not ensure a profit or protect against a loss in a declining market.

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