Equities Surge Higher: Why aren’t Bonds Panicking?
The Art of Investing
Portfolio Positioning Versus US Exposure
Chris explains the portfolio's underweight US stance and heavier allocations to Europe, EM, Japan and small caps.
This week on The Art of Investing, Rich McDonald, Mark “Spice” Holden and Chris “CJ” Fellingham unpack a quietly powerful week in markets.
While headlines remain focused on AI, tariffs and geopolitics, European markets are breaking higher, bonds are behaving, and liquidity is quietly driving asset prices.
The team explores why risk assets continue to rally despite macro uncertainty, and why the bond market remains the ultimate signal to watch.
Plus: a deep dive into portfolio volatility using AI, the silver short squeeze debate, and what could finally derail this bull run.
This Week’s Highlights:
📈 Europe Leads Again
FTSE 100 hits fresh highs, the DAX continues to climb, and the Euro Stoxx 600 builds momentum.
🏦 Bonds Behaving
US 10-year yields hit 12-month lows. No panic. No inflation scare. Why does it matter?
🤖 AI = Disinflation?
Is productivity from AI quietly suppressing inflation expectations?
🪙 Silver Squeeze Talk
Is there really a conspiracy in silver, or just classic retail momentum?
🌍 Emerging Markets Build
Portfolio exposure increases as global growth expectations strengthen.
📊 AI Analyses the Portfolio
CJ uses AI to calculate portfolio volatility in minutes, and the results may surprise you.
Portfolio Snapshot - Week 27:
Weekly performance: +0.5%
Total return since inception: +17.3%
Top Performers
🥇 iShares Core FTSE 100 ETF: +2.4%
🥈 Invesco Stoxx Europe 600 ETF: +2.0%
🥉 Xtrackers DAX ETF: +1.9%
Underperformers
📉 VanEck Crypto & Blockchain Innovators ETF: –0.5%
📉 Nikkei 225 ETF: 0.0%
📉 Cash: +0.1%
Portfolio Positioning:
The portfolio remains tilted toward:
• European equities
• Emerging markets
• US small and mid-caps
• Commodities exposure
Cash and bonds remain limited (~20% combined), keeping overall volatility aligned with the S&P 500, but with broader geographic diversification.
Big Themes This Week:
• Liquidity is still abundant
• AI may be structurally disinflationary
• Bond markets are calm, for now
• Cyclical exposure remains the key risk
• Dollar weakness would benefit positioning
The central question:
As long as bonds behave, does this rally have further to run?
What You’ll Learn:
✔️ Why bond yields are the most important signal in markets
✔️ How AI could structurally lower inflation
✔️ Why European markets are outperforming the US
✔️ How to measure portfolio volatility properly
✔️ Why silver squeezes rarely end well
📈 Download the full Portfolio Performance Slides
View the portfolio breakdown: here
📧 Get in touch: theartofinvesting@ig.com
Subscribe for weekly investing insight and to follow the live portfolio in real time.
Disclaimer
This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.
Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.
February Incentive
Get up to £3000 when you transfer your ISA to IG.
Earn 1% cashback up to £300k when you transfer your ISA before 5th April.
Use Promo Code ISAPODCAST
New share dealing customers only. Offer available 31st Jan to 5th April 26. T&Cs apply.
The AI-powered Podcast Player
