Global Conservative portfolio positioning intra-quarter update as of 3/3/2020

Reduced international equity exposure; modestly increased favored U.S. equity sector allocations

March 3, 2020

With the COVID-19 coronavirus spreading around the globe, we have modestly adjusted our global portfolios by reducing international equity exposure, which we view as more vulnerable to economic impacts from the disease and related policy actions. We have redeployed proceeds across favored U.S. equity sector exposures, which we believe are collectively positioned more defensively than our global benchmark.

Reduction of international exposure: COVID-19’s economic impacts have been most concentrated in Emerging Markets to this point; going forward, we believe developed economies will experience increased negative economic and earnings impacts, but that the risks are higher for international developed markets as compared to the U.S. Developed Europe and Developed Asia, which were already on weaker economic footing than the U.S., in our view, are vulnerable to the negative economic impacts of a broader outbreak and related mandatory or self-imposed public health measures.

Additions to favored U.S. equity sector exposures: We believe the U.S. has greater ability to weather the economic headwinds COVID-19 presents, given its relative economic strength, and has greater options for fiscal and monetary policy responses to mitigate potential economic impacts from the outbreak. Our U.S. sector exposure, which is already defensively positioned with overweights of Consumer Staples, Health Care, and Utilities, as well as avoidance of the more economically-sensitive sectors, should be less susceptible than international equities to negative economic, earnings, and market impacts.

Portfolio rebalance: Given these adjustments and position deviations from target weightings due to recent market movement, we have taken this opportunity to implement a rebalance of portfolio positions.

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 Conservative 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.

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