The biggest change to our positioning is a shift toward European stocks, which have underperformed relative to U.S. equities and offer more attractive valuations. Central bank policy, a weaker euro, and lower oil prices all support a European recovery. We are also making some enhancements across the board in our asset allocation portfolios to move away from our U.S. equity bias and toward global and non-U.S. equity strategies, as well as adding exposure to non-U.S. bonds.
These changes are part of our disciplined, systematic approach in which we routinely evaluate various asset classes for inclusion in the portfolios. We believe these changes will broaden the portfolios’ diversification, reduce exposure to any single country, and increase opportunities to improve risk-adjusted performance at a time of heightened economic and policy uncertainty. Continue reading