Positioning in Core Bonds and Emerging Markets
In this episode of Portfolio Playbook, host Damanick Dantes, CMT breaks down the macro and market forces driving recent allocation shifts in the Dantes Outlook ETF Portfolio. We explore improving credit quality, renewed opportunities in fixed income, and model-based macro positioning from DeepMacro. Damanick explains how currency correlations shape portfolio tilts and why traditional trend-following is struggling in 2025. Later, Victor Zhou, portfolio strategist at Dantes Outlook, joins to discuss a State Street framework for emerging market investing — including how higher activeness and EM small caps can enhance alpha potential and resilience.
Dantes Outlook Market Podcast · victor zhou
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Show Notes
Topics Covered:
Portfolio construction in today’s macro climate — balancing risk, correlations, and tracking error.
Credit market health — Morningstar DBRS and Proskauer data show improving leverage, coverage, and default rates.
Bond market reset — Deutsche Bank’s historical context on the worst 5-year Treasury returns and forward expectations.
Opportunities in core bonds — PIMCO’s view on yields, international duration, and diversification benefits.
DeepMacro model positioning — long USD, contrarian equity overweight, and rates strategy.
Trend-following under pressure — why CTAs are lagging in 2025.
Emerging markets strategy — Victor Zhou on activeness, tracking error, and the under-researched alpha potential in EM small caps.
Key Takeaways:
Dollar correlations are a driver of our U.S. equity overweight.
Credit fundamentals are stronger, with default rates falling.
Bond valuations have reset, creating better entry points, but real returns may remain modest.
Trend-following struggles highlight the need for multi-strategy systematic approaches.
In emerging markets, higher activeness and small-cap allocations improve alpha opportunities.
References:
Morningstar DBRS
Proskauer Private Credit Default Report
Deutsche Bank Global Markets Research
PIMCO Fixed Income Outlook
DeepMacro Model Positioning
State Street Emerging Markets Strategy Research
The information presented is for informational purposes only and should not be considered as investment advice nor as a recommendation of any particular strategy, allocation or investment product: before making any investment decision, you should seek expert, professional advice and obtain information regarding the legal, fiscal, regulatory and foreign currency requirements for any investment according to the laws of your home country and place of residence. Investing involves risk, including the possibility of loss of principal. Any forward-looking statements or forecasts are based on assumptions and actual results may vary from any statements or forecasts.
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