Ramin Nakisa

It depends.

It does generate a small positive revenue longer term.

I mean, there's mixed research on it.

It depends also on what you've got in the bucket, right?

Because if it's highly correlated, like if you have, say, high-yield credit combined with equity, they tend to fall together.

So that wouldn't work.

But if you've got commodities...

cash, fixed income, combined with equity, there you get much more alpha because they're uncorrelated.

The things that make one asset class freak out and say, we're going to crash, that wouldn't affect everything in the portfolio.

So it's just that rebalancing effect.

Yeah, one of the tools I've written is really cool.

It's kind of got the bond yield curve.

So these are the individual bonds which the UK government issues.

And it's got the yield on each one, which is roughly the return you receive on it, based on how many years to maturity.

And it's like a living thing.

I've got this animation tool so you can click on play and you can watch all the bonds kind of jiggle around.

If you go back to 2022, it's all flat and low.

And if you put it in real terms, it's below the curve, it's negative.

And then suddenly in 2022, 2023, you get this huge inflation spike.

the central banks raise rates and it starts going like that and it starts twitching.