As we have been saying, US sovereign bonds have annual yields of around 5%. Being an asset of refuge, par excellence, they are quite suitable for the current times of turbulence, so we decided to reinforce the exposure of our portfolios to the funds/ETFs of sovereign bonds in USD – all in all, despite the challenges US economy still has strong assets for the future.
Conversely, we are withdrawing assets from Sweden (equity and bond funds). The Stockholm stock exchange retains some assets but is a cyclical market (industrial weighs 40%) and, therefore, less suitable.
Moreover, due to the central bank (Riksbank) policy, the Swedish krona is expected to maintain its chronic undervaluation against the euro, which calls into question potential currency gains. In addition to impacting shares, this exchange rate aspect was the only asset of bond funds in Swedish kronor (SEK).
In short, and more specifically, in the leading portfolio, we are increasing sovereign bonds in dollars to 15% and exiting the 5% slot in SEK stocks and bonds.
In the end, with this strategy, the approach is now more balanced (50%/50% between stocks and bonds).
