A massive risk premium compensates traders for inflation threat, in our view.Government bondsWe are strategically underweight nominal government bonds given their diminished ability to act as portfolio diversifiers with yields close to decrease bounds. We see traders demanding larger compensation for holding government bonds amid rising inflation and debt ranges. Tactically, we also underweight authorities bonds as we see the course of travel for long-term yields as greater – even as yields have surged in 2022. We prefer inflation-linked bonds as portfolio diversifiers within the larger inflation regime.Private markets-We believe non-traditional return streams, including personal credit score, have the potential to add value and diversification. Our impartial view is predicated on a starting allocation that’s a lot bigger than what most certified buyers hold. Many institutional traders remain underinvested in private markets as they overestimate liquidity dangers, in our view.