Insights Asset Allocation Shift: Reducing Risk

Rebecca Patterson

Feb 13, 2019

Highlights

  • While we do not see a U.S. or global recession as imminent, the ongoing global growth slowdown along with significant risks makes us skeptical that equities will post material, sustained gains from here.
  • January’s equity recovery following December’s extraordinary sell-off provides an opportunity to increase defensive holdings as part of our medium-term process to prepare portfolios for the next sustained downturn.
  • We are moving to a modest equity underweight (versus strategic client benchmarks) and increasing exposure to high-quality fixed income.
  • We remain significantly titled toward U.S. equities and have increased exposure to managed-volatility equity strategies to further manage late-cycle volatility.

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Chief Investment Officer
Rebecca is Chief Investment Officer of Bessemer Trust. She is also a member of the firm’s Management Committee.