Mid-course adjustments for the Island Light portfolios

By Matthew PierceCovestor

By Matthew Pierce

Investors in our portfolios will observe a set of trades made in the Island Light Global Diversified Portfolios over the last week or two. Part of our normal periodic rebalancing, and in keeping with our philosophy of Enlightened Investing™, we updated returns, expectations, market capitalizations and other items across our investment universe over the last few weeks, keeping the overall framework and methodology consistent with our current read of the marketplace and investment trends.

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As a result, we returned many of the portfolios to a more balanced, home biased global weighting. In addition, we retained modest overweighting to equities relative to our benchmarks.

We also further reduced commodities exposure, longer duration and treasury bond allocations towards shorter duration fixed credit instruments and alternative strategy, lower volatility macro hedge. Finally, we reduced emerging markets exposure slightly and increased US mid-cap allocations where appropriate.

These trades are non-directional but reflect the current healthy US equity market, low interest rate and weak commodities environment.

Globally, we are increasing our European exposure back towards a market weight due to lower equity valuation in European equities, as well as our suspicion that the dollar may be in for a period of weakening relative to other currencies, which should help US-domiciled global investors. The above re-allocations are not major tactical tilts, but reflect a moderate repositioning of the portfolios.

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