Proper diversification adding value through stormy conditions.
We triggered our latest Tactical Asset Change (TAC) across our Growth portfolios in early July.
This year’s Iran-driven energy shock, and the sharp rally that followed, have underlined the value of genuine diversifiers within portfolios. With equity valuations, particularly in the US, remaining elevated and market leadership still narrow, we have kept overall equity risk close to neutral. At the lower-risk profiles, we modestly increased equity exposure, funded from alternatives, improving diversification and strengthening these portfolios’ long-term resilience to inflation.
What changes have we made, and why?
Within equities, we continued to reduce our UK exposure, trimming our holdings with a more cyclically oriented focus, and added to US and global strategies. We increased our targeted technology exposure through Janus Henderson Global Technology Leaders, while adding to defensive, large cap quality via Redwheel Global Equity Income, a combination we believe balances participation in market strength with resilience should conditions turn.
We also modestly added to our gold and silver equities through Jupiter Gold & Silver following recent weakness. Adding to assets we hold with long-term conviction after short-term setbacks is a core part of our process. With bonds offering less reliable protection in an inflation-driven market, precious metals remain an important diversifier and a useful hedge against inflation and geopolitical risk.
In fixed income, positioning is broadly unchanged. Upside risks to inflation and large fiscal deficits continue to put pressure on longer-dated yields and have weakened bonds’ traditional diversification benefits. We therefore retain our underweight to bonds and our short-duration bias.
In alternatives, we completed the sale of one strategy and introduced AQR Managed Futures, a new trend-following strategy. Trend-following strategies provide low correlation to traditional assets and the potential for returns during periods of market stress, further strengthening the alternatives allocation that has served portfolios well over time. We also modestly increased JPM Global Equity Absolute Alpha and trimmed Argonaut Absolute Return.
Together, these refinements are designed to keep portfolios resilient and well positioned to navigate elevated valuations, inflation uncertainty and continued geopolitical tension
The Full Tactical Asset Changes Report, detailing full portfolio changes across the range, holdings report, along with leavers & joiners to follow shortly…
Important Information
This video is for information only and does not constitute advice or recommendation and you should not make any investment decisions based on it. The views and opinions of this video are those of Casterbridge at the time of recording and may change without notice. Any opinions should not be viewed as indicating any guarantee of return from investments managed by Casterbridge nor as advice of any nature. It is important to remember that past performance and the value of an investment, and any income from it, may go down as well as up and the investor may not get back the original amount invested.