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Komson Silapachai: Hello, this is Komson Silapachai, Vice President of Research and Portfolio Strategy here at Sage, and I'm here to give you a fixed income outlook for February 2020. It has been quite an eventful year. I think it has been dominated by headlines and the reality of the coronavirus that started in China. But when you look at the market reaction, it’s largely contained to the assets that are linked to China – so Chinese equities, Asian equities, commodity markets. What's been really resilient has been U.S. fixed income, and I wanted to highlight some of the drivers behind that and how we’re positioning for it this year. So two main reasons for the resiliency of fixed income, we think; first is policy stimulus, we've seen quite a bit of injection of liquidity by global central banks coming into the end of last year, through the first of this year. And the second reason is flows. So, we're seeing flows really contribute to the resiliency of fixed income here primarily from foreign investors. We think that continues, as long as foreign exchange reserves or international countries continue to grow. We think that those monies eventually come to the U.S. fixed income market. So, we're seeing that flow come into investment grade corporates, and we're seeing valuations reflect that. Investment grade corporate bonds are at extreme valuations. You can look at it versus leverage or really any measure you'd like. And so, you know, in terms of how we’re positioned, we're not overweight corporate bonds here, we think that they're fully valued. We like to kind of find pockets of opportunity, and one that we have identified currently is in the commercial mortgage backed securities market. We think that when you look at spreads in the CMBS market, especially in the short end versus corporate bonds or other asset backed securities, we think that they're at actually a pretty attractive level, so we're really diving into more of the relative value between sectors rather than trying to take a huge spread bet. That's how we're positioned, we still remain neutral in terms of our interest rate posture; we think that yields will remain low but we’re stable here. You know, we don't see a big, sustained move higher in yields given the lack of inflation. And so we remain neutral on yields, neutral in our duration stance. And that's all for this month. Look forward to chatting with you guys next month. Thank you.
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