What recent investment allocation changes has your firm made?
We added a long duration trade that will benefit clients should we see a significant economic slowdown. Bonds are attractive given the Fed’s aggressive rate hikes and currently elevated real yields.
What’s your top contrarian pick at the moment?
We increased our overweight to U.S. large cap value and we added to our underweight to U.S. large cap growth given relative valuations and our expectations for much slower economic growth.
In what areas of the market are you taking risk off?
We are neutral risk overall given valuations have adjusted materially and the likely trajectory of Fed rate hikes. Uncertainty over inflation and a recession vs. a soft landing during the late stages of the business cycle—and hence, the terminal Fed Funds rate—keeps us on the sidelines. Within equity markets we have taken risk off in large cap growth and in U.S. vs. non-U.S. stocks.
What fund families or model portfolio providers do you use?
We use our own Tactical Risk Managed Portfolios created and managed by the office of the CIO at Beacon Pointe.