Scaling Back Exposure To EM Assets

TS Lombard recommends reducing exposure to Emerging Markets in favor of Developed Market equities and high-yield credit due to expected Fed monetary tightening and USD strength. Despite the shift, they maintain a positive outlook on the AI hardware cycle, particularly in Korea and Taiwan.

Key Takeaways

• 1.Rotation from Emerging Markets into Developed Market equities and high-yield credit to mitigate risk from expected Fed tightening and a stronger dollar.
• 2.Maintaining a positive bias on the AI hardware trade, particularly in Korea and Taiwan, due to improving LLM capabilities.
• 3.Portfolio beta reduced to 1.09 from 1.12 by trimming exposure to managed futures and increasing cash allocations.

Table of Contents

• Multi Asset
• Model Portfolio
• Equities
• Fixed Income
• Currencies

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