U.S. Sector Portfolio Positioning Intra-Quarter Update as of 10/01/2018

Adjusted Portfolio to Account for Sector Classification Changes

We made several adjustments within the U.S. Sector strategy to maintain our desired fundamental exposures as the underlying holdings of several sector-based ETFs in the portfolio changed. As previously announced, Standard & Poor’s and MSCI decided to reorganize their Global Industry Classification Standard (GICS) at the end of September 2018 to create a new “Communication Services Sector.” This new sector combined the former Telecommunication Services Sector with media, advertising, and entertainment companies taken from the Consumer Discretionary Sector, and with certain internet and entertainment software companies taken from the Information Technology Sector. Correspondingly, various ETF sponsors adjusted the underlying holdings within ETFs that are based on the affected sectors.

To account for changes in sector classifications and sector-based ETF composition, we modestly reduced exposure to the Consumer Discretionary and Information Technology Sectors and added exposure to the new Communication Services Sector. These adjustments did not reflect any change in our economic outlook or our desired fundamental exposures for the portfolio. Instead, they were intended to keep portfolio exposures in line with our existing outlook as the underlying holdings within certain ETFs changed. In conjunction with these adjustments, we also conducted a full rebalance of portfolios.

The most recent complete presentation can be viewed here.
Any portfolio characteristics, including position sizes and sector allocations among others, are generally averages and are for illustrative purposes only and do not reflect the investments of an actual portfolio unless otherwise noted. The investment guidelines of an actual portfolio may permit or restrict investments that are materially different in size, nature and risk from those shown. The investment processes, research processes or risk processes shown herein are for informational purposes to demonstrate an overview of the process. Such processes may differ by product, client mandate or market conditions. Portfolios that are concentrated in a specific sector or industry may be subject to a higher degree of market risk than a portfolio whose investments are more diversified.
Holdings, Sector Weightings and Portfolio Characteristics were current as of the date specified in this presentation. The listing of particular securities should not be considered a recommendation to purchase or sell these securities. While these securities were among WestEnd Advisors’ U.S. Sector holdings at the time this material was assembled, holdings will change over time. There can be no assurance that the securities remain in the portfolio or that other securities have not been purchased. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities presently in the portfolio. Individual clients’ portfolios may vary.