Multi-Asset portfolio outlook, positioning, and attribution as of 06/30/2026
June 30, 2026
Outlook:
- The global economic cycle is mature but remains on track, in our view, and we expect trend-like growth to continue with a modest cyclical pickup in some regions, increasingly supported by investment rather than the consumer.
- Private fixed investment tied to AI infrastructure has supported tech-focused areas of the U.S. 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 U.S. 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.
- We see improving trends for cyclical activity in Europe, supported by improving credit conditions, stabilizing manufacturing activity, and greater earnings participation across a range of sectors.
- We believe risks have increased in Asia and emerging markets, tied to increasing market concentration and dependence on the global semiconductor cycle.
Positioning:
- We are positioned for ongoing expansion, accounting for risks and opportunities we see ahead.
- In U.S. large-cap equities, we maintain significant tech-related and Financials exposure and have added Materials sector and Transports allocations, while still avoiding some of the most cyclical sectors, and we also maintain an opportunistic U.S. small-cap allocation.
- We have reduced consumer-facing U.S. exposure, where we see potential headwinds, and we maintain Health Care and Utilities allocations that we expect can outperform if growth slows.
- We are underweight international equities, in aggregate, but have increased our overweight of Europe, where we believe valuations underestimate earnings growth potential, and reduced EM Asia exposure tied to its increasing dependence on sustained growth from tech hardware.
- Within fixed income, we have increased emphasis on longer-term Treasury exposure while our reduced corporate allocation is focused in shorter maturities to limit credit spread risk.
- Given the wide range of factors potentially impacting economic growth and inflation in the current environment, we retain a diversified real asset allocation with a range of commodities exposures, energy infrastructure exposure, and a reduced emphasis on gold after several years of robust outperformance for the precious metal.
Q2 Attribution
Positive Contributors:
Underweight
- U.S. Lg.-Cap Information Technology Equities
- Fixed Income Asset Class
- U.S. Lg.-Cap Energy Equities
Negative Contributors:
Overweight
- Real Assets
- U.S. Lg.-Cap Communication Services Equities
Underweight
- Equities Asset Class
Attribution Analysis is relative to the Multi-Asset 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’ Multi-Asset 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.