Multi-Asset portfolio positioning intra-quarter update as of 02/03/2026

Evolving macroeconomic factors, from ongoing AI investment to Chinese real estate market support, could benefit a range of commodity-related assets. We have increased and diversified our real asset allocation and reduced fixed income and gold allocations where we see relatively less attractive risk/reward profiles going forward.

February 3, 2026

ACTIONS and OVERVIEW:

Diversified portfolio’s commodity-related asset exposure

• Added new diversified natural resources equity ETF holding
• Trimmed existing gold ETF holding

Increased energy infrastructure allocation

• Added to existing energy infrastructure MLP ETF holding

Reduced fixed income asset class allocation

• Trimmed existing fixed income ETF holdings (pro rata)

Portfolio rebalance

AI and tech investment have helped extend late-cycle economic growth globally, despite headwinds from factors like soft non-tech fixed investment and a real estate bust in China.  Going forward, we see ongoing tech investment and related demand growth for energy and electricity as likely to provide secular tailwinds for industrial metals.  We also expect China to maintain policy support for power generation, EV and semiconductor production, and its real estate market, all of which can support both global economic growth and industrial metals demand.  Meanwhile, in our view, a global oversupply of crude oil is likely to shift to a more balanced supply/demand environment as economic growth continues.  Thus, we have diversified commodity exposure beyond gold and increased energy infrastructure exposure while reducing the portfolio’s gold and fixed income allocations.

UPDATE DETAIL:

Diversified portfolio’s commodity-related asset exposure

• We have initiated a natural resources allocation with diversified exposure to global companies operating across the Energy, Metals and Mining, and Agricultural industries.
• We expect metals like copper and aluminum to benefit from ongoing investment in data centers and electrification, as well as improving traditional end-markets like U.S. and China residential construction, supported by lower interest rates, improving credit growth, and stimulative policies.
• Crude oil has been in a period of oversupply, tied to recent OPEC+ supply increases, but we anticipate a more favorable supply/demand environment for crude, especially if softer areas of the global economy begin to recover.
• We have reduced gold exposure, which has seen more than a doubling in price over the past two years as markets priced in factors such as inflationary dynamics, geopolitical risks, falling real interest rates, and a weaker U.S. dollar.

Increased energy infrastructure allocation

• We have added to existing energy infrastructure exposure, (MLP and equity exposure to midstream assets such as storage and pipelines), which we believe will benefit from natural gas demand growth and offers more insulation from commodity price volatility than major oil companies.
• MLPs also trade at attractive multiples, in our view, that are roughly in-line with their trailing 10-year average while valuations for global equities are roughly two standard deviations above their 10-year average.

Reduced fixed income asset class exposure

• We have reduced the portfolio’s fixed income allocation, given the prospects for continued global economic growth and typical underperformance of bonds during expansions.
• Despite modest disinflationary pressures, we do not expect significant downside to U.S. interest rates (upside to bond prices) without significant economic deterioration, absent which we see a more attractive risk/return profile in our real asset allocation, which also offers bond-like yields.