A new role for US equities in multi-asset portfolios

JP Morgan
By October 7, 2020 13:24

A new role for US equities in multi-asset portfolios

Multi-Asset Solutions Weekly Strategy Report

IN BRIEF

  • From a portfolio perspective, exposure to tech winners in U.S. equities is not a free lunch. The same growth stories that prompted outsize U.S. equity returns in recent years and a faster recovery from the COVID-19 shock make the U.S. a higher volatility, higher beta market, at least for now.
  • The shift is a symptom of rising market concentration, which reflects the potentially powerful influences of investor crowding, swings in sentiment and high valuations, along with business fundamentals.
  • We still score U.S. equities as an overweight, and like its tech exposure in combination with cyclical equity markets including emerging markets and Europe.
  • Given the S&P 500’s reduced defensiveness, and the fact that bond yields are pinned down by monetary policy, it has become more difficult to find effective portfolio hedges.
JP Morgan
By October 7, 2020 13:24

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