In the US, the 10-year Treasury yield could potentially rise towards the 6 percent mark, particularly as one-year-ahead inflation expectations have climbed to 4.7 percent, said Shailendra Kumar, Chief Investment Officer at Narnolia Financial Services, in an interview with Moneycontrol.
According to Kumar, a prolonged period of elevated energy prices could put pressure on inflation, the current account and corporate margins, making the duration of the crude oil price spike a critical variable to monitor.
The sharp market correction in September provided an opportunity to rebalance portfolios, he said. Kumar added that he trimmed exposure to select stocks, particularly in the mid- and small-cap segments, while increasing allocations to banking and automobile stocks.
Would you say that bonds are emerging as an interesting alternative to equities after a long time? Do you see the possibility of US bond yields surpassing 6 percent mark?
Bonds should not be viewed as an alternative to equities, but rather as a complementary component of a well-diversified portfolio, alongside other asset classes such as real estate, gold and alternative investments. A prudent asset allocation framework seeks to balance growth, stability and risk across market cycles.