We believe a defensive approach within equity allocations makes sense today given continued unresolved macroeconomic concerns. While there are several viable strategies, approaches can vary significantly across indices and managers, making implementation a critical consideration.
Our U.S. equity recommendations over the past couple of years have shown mixed results, with large-cap and high-quality stocks lagging behind in the market rally, but growth maintaining a consistent edge over value. After a fresh assessment of current conditions, we conclude that these portfolio tilts still make sense today.
The powerful move in equities from their March lows has outpaced fundamentals. History indicates that at this point in the cycle the easy gains have been made and returns going forward will likely be muted.