Global Balanced Portfolio Outlook, Positioning, and Attribution as of 6/30/2019

Outlook

• The U.S. economic expansion continues. Despite slowing growth and early signs of economic impact from international trade tensions, we still view moderate growth as likely in the near-term.
• The current, partially-inverted shape of the yield curve is unsustainable, in our view, and some reduction in short-term rates seems the most likely path toward rate normalization.
• International economic growth has suffered this year, in part, due to weaker manufacturing activity in Germany and Japan.

Portfolio Positioning

• We believe the maturing economic cycle warrants exposure to U.S. equity sectors with a mix of cyclical and secular drivers, such as Info. Tech. and Comm. Services, as well as less economically-sensitive sectors, like Consumer Staples, Health Care, and Utilities.
• We eliminated U.S. Financials equity exposure in light of slowing economic growth and the evolving interest rate environment.
• An underweight of international equities reflects the relative attractiveness of the select U.S. exposures as international economic growth continues to struggle against structural challenges, cyclical patterns, and headwinds to global trade.
• With increased likelihood of Fed rate cuts, we have de-emphasized shorter-duration fixed-income securities.

Q2 Attribution

Attribution Analysis is relative to the Global Balanced benchmark and was current as of the date specified in this presentation. A complete attribution report is available upon request. 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’ Global Balanced 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. Upon request, WestEnd Advisors will provide a list of all recommendations for the prior year.