Large-Cap Core Equity portfolio outlook, positioning, and attribution as of 06/30/2026
June 30, 2026
Outlook:
- The economic cycle is mature but remains on track, in our view, and we expect trend-like growth to continue with a broadening of cyclical activity, increasingly supported by investment rather than the consumer.
- Private fixed investment tied to AI infrastructure has supported tech-focused areas of the economy, and while tech infrastructure spending growth could slow, we see signs of a broader pickup in a range of business investment and cyclical activity that we believe should help sustain economic growth.
- The U.S. consumer has been outspending income growth for the past two years and, while increased tax refunds from the “One Big Beautiful Bill Act” may have helped offset near-term headwinds from higher gas prices, the savings rate is near all-time lows, suggesting limited ability to accelerate spending.
- U.S. core inflation may have reached a peak and, in our view, should modestly improve through 2026, ending the year slightly above +2.5%, before a gradual return toward the Fed’s inflation target in 2027, but the path for Fed easing has narrowed commensurate with recently stronger labor market data.
Positioning:
- We are positioned for ongoing expansion, while adjusting exposures for risks and broadening opportunities we see ahead.
- We have implemented a mix of early- and mid-phase sectors that we believe provides an appropriate level of economic sensitivity and exposure to positive secular trends.
- We maintain exposure to the Financials sector and have added exposure to the Transportation industry, but we are still avoiding some of the most cyclical early-phase sectors.
- We have reduced consumer-facing exposure by trimming the Consumer Staples sector, as we see fundamental tailwinds shifting from the consumer to investment.
- We retain an allocation to the late-phase, defensive Health Care sector, which we believe has appealing fundamentals and can also outperform if growth slows.
Q2 Attribution
Positive Contributors:
Underweight
- Energy
- Industrials
Negative Contributors:
Overweight
- Health Care
- Financials
Underweight
- Information Technology
Attribution Analysis is relative to the S&P 500 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.
The information presented herein has been gathered from sources believed to be reliable, however data is not guaranteed. 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’ Large-Cap Core Equity 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.