Here’s what’s happening in flagship portfolios:
- Even though volatility has picked up in recent days, market falls have been relatively contained as mentioned above. Changes made to our flagship portfolios earlier this quarter were designed to brace for possible market turbulence by locking in profits from segments showing strong performance, particularly those where valuations seemed overstretched.
- Meanwhile, we have been shifting towards low-volatility stocks in Europe, which carry more defensive characteristics. At the same time, we have recently added to our US investment grade corporate bond exposure, as we have more confidence that the peak in interest rates is closer in the US relative to other regions.
- After a sharp rebound in most risky assets this year, we believe a cautious approach is warranted given the macroeconomic and market uncertainty that may arise. This is why we continue to own more high-quality bonds versus our long-term asset allocation, and slightly less equity and riskier bonds.
- Furthermore, our portfolio holdings remain biased towards investments which we believe demonstrate solid long-term growth prospects, strong balance sheets, and attractive valuations. These attributed can serve as a buffer in the event of a reversal in market sentiment.
Past performance is not a reliable indicator of future returns.