Forvis Mazars has cut its UK equities weighting as part of its third quarter managed portfolio service (MPS) rebalancing.
The firm also trimmed holdings of US mega-cap tech stocks in favour of broader exposure across the market cap scale.
The UK equities cut was delivered via selling down holdings of UK index tracker funds.
The broader result was a reduced equities weighting overall across the portfolios, while remaining marginally overweight US equities.
This reflects a view that challenges are starting to build for equities markets, but the fundamental economic backdrop still remains supportive to risk assets.
The tilt away from US mega-cap technology names into broader US exposure is a continuation of a theme begun in the first quarter of this year.
It has been achieved via a shifting out of market-capitalisation weighted trackers into the L&G S&P 500 Equal Weighted Index fund.
Other changes included a return to a neutral gold position from underweight, and an increase to government bond exposure through investments in US treasury inflation protected securities and gilts.
Gilts now appear attractive, Forvis Mazars noted, with yields on the 10-year of around 5% more than compensating for political and inflation risks.
See also: Monday Manager JO Hambro’s Herson: ‘The UK market is under M&A attack’
In the Core Cautious and Balanced MPS the firm switched from BlackRock Continental Europe into a tracker fund, and reduced emerging market local currency debt in favour of other fixed income assets.
The firm also increased its position in the Baillie Gifford Pacific fund, using a reduction in emerging market tracker fund holdings.
Ben Seager-Scott (pictured), chief investment officer at Forvis Mazars, said: “Equity markets have delivered strong returns so far this year, supported by underlying earnings growth.
“Our portfolios have benefited from maintaining a positive tactical equity stance throughout this period, and we are now taking some profits from those positions.
“At the same time, we are continuing the trade initiated at the start of the year by tilting away from mega-cap US technology names and reinvesting across the broader US market, which we believe will be among the principal beneficiaries of AI-enabled productivity gains.”
This story was written by our sister-title, PA Adviser
Leave a comment