The global economic outlook remains uncertain with US and European economies having to digest higher rates and tighter lending conditions and Chinese economic growth falling significantly. As a result, we think it's very likely that bonds will soon re-assume their role as a hedge against equity market volatility. Whether you believe in a soft landing or a hard landing, the global economy is set to slow and central banks will ultimately respond by ending their respective rate hiking cycles.

In this paper we explain why, with the approach of the peak in policy rates and with global yield curves remaining very inverted, investors should take the opportunity to position themselves in short duration credits to capitalize on the higher rate environment.