Scaling Back Exposure To EM Assets

TS Lombard recommends rotating out of EM assets into DM equities and High-Yield credit to navigate potential US Fed tightening and a strengthening dollar. They maintain AI-related overweights in Korea and Taiwan but warn of softening Chinese growth.

Key Takeaways

• 1.The team is rotating from EM assets into DM equities and high-yield credit due to looming Fed tightening, a stronger dollar, and weak Chinese macro data.
• 2.Portfolio beta is reduced to 1.09 from 1.12, with increased cash positions and lower exposure to managed futures and industrial metals.
• 3.The firm remains constructive on AI hardware, maintaining overweight positions in South Korea and Taiwan.

Table of Contents

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

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