Tactical Investment Strategy August 2019

Until the next FOMC meeting in mid-September, markets are most likely to be influenced by trade news and economic data, which have both generated negative headlines recently. Coupled with the fact that we are entering what is typically a weak seasonal period for risk markets, we are expecting a choppy late summer with increased downside risks. To this end, we have become modestly more defensive across our allocations. Within equities, we pared our EM exposure, remain underweight developed international regions, and have shifted some U.S. exposure toward more defensive and interest rate-sensitive sectors. In our multi-asset income strategies, we lowered equities and non-core fixed income and increased our overall duration. Within fixed income, we continue to pursue a yield carry strategy, with a spread sector overweight, but a longer duration to help protect against bouts of spread widening.

  • DATE: August 12, 2019

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