Asks Todd if he sees move away from US-centric assets and what's driving it from flow perspective.
Dominic Chu
Todd Sohn
Yes, flows show diversification away from US (not selling US) into EM for better risk-return after decade of underperformance.
Asks where income-oriented flows are going: dividend stocks, bond ETFs, or alternative income instruments.
Dominic Chu
Todd Sohn
Option-income ETFs (covered calls) have outnumbered dividend ETF flows over last three years; money market funds dominate but may deploy into fixed income as cuts come.
Asks about signs of stress from deteriorating credit quality given tilt to income strategies.
Dominic Chu
Todd Sohn
Doesn't necessarily see stress; credit spreads at multi-decade lows, banks okay. Stress point is private capital stocks (public PE/private credit names) with markdowns, but seems contained.
Asks Todd how investing landscape changes with new Fed chair and more variable policy.
Dominic Chu
Todd Sohn
Expects more equity volatility due to new Fed chair and midterm election; low-vol strategies may comeback.
Asks Todd what could derail markets in next couple quarters.
Dominic Chu
Todd Sohn
Credit event in illiquid private credit space leaking into financial system would be main risk; otherwise, credit spreads, banks, consumer seem okay.