Asset Allocations: Generally neutral allocations in early 2021
Change from previous quarter
|U.S. large cap|
|U.S. small cap|
|U.S. investment-grade corporates|
|U.S. floating-rate bank loans|
|U.S. high yield|
|Non-U.S. developed country|
Currency viewsU.S. dollar versus
|Favor other||Neutral||Favor dollar|
Risk assets have an edge
We see a strong cyclical recovery ahead and favor an overweight to risky assets.
We favor large-cap U.S. equities
With neutral weightings in most equity categories, we see the potential for U.S. large-cap equities to continue to rise in early 2021.
We have dialed down high yield
We are also neutral on most areas of fixed income, and favor reducing the overweight to high yield from late 2020.
Increase to commodities
Given the unusual nature of the crisis, it will be important to have tactical flexibility and open-mindedness to the idea that the recovery is also likely to be unusual.