Seema Shah

Even with a resolution to the Iran conflict and reopening of the Strait of Hormuz, oil prices will remain elevated above $80 a barrel through the end of the year due to infrastructure damage and supply-side constraints, unless significant demand destruction occurs.

China is a preferred portfolio diversifier because it has its own ecosystem, is less exposed to the Iran conflict, and has lower correlation to the U.S. market compared to Europe. It offers a way to reduce concentration risk in a market dominated by AI and U.S. tech.

Investors will stay focused on technology because AI companies have strong balance sheets, positive cash flow, and a moat, making them a safe haven for growth and earnings. Despite cyclical vulnerabilities from geopolitical conflict, the secular AI theme will persist for years, and any dip is an opportunity to build exposure.

Lower middle market lending within private credit is attractive due to its lower exposure to software and low leverage, and Principal Asset Management continues to favor this segment.

Geopolitical events have reinforced investment themes in defense, infrastructure spending, and energy security, making them attractive areas for investment.

Geopolitical events have reinforced investment themes in defense, infrastructure spending, and energy security, making them attractive areas for investment.

Geopolitical events have reinforced investment themes in defense, infrastructure spending, and energy security, making them attractive areas for investment.

You see oil prices remaining over $100 a barrel for a while and that feeding through to inflation. If things progress in a negative way, we would probably take those rate cuts off of the forecast. Energy-driven inflation acts as a tax on the economy while simultaneously forcing central banks to abandon planned rate cuts. Higher-for-longer interest rates directly suppress the value of long-duration government bonds. SHORT. Sticky, supply-driven inflation removes the Federal Reserve's ability to ease monetary policy, driving yields higher across the curve. A severe macroeconomic recession caused by the energy shock could eventually force a flight to safety, bidding up long-term Treasuries despite inflation.