Capital deployment

The grim specific circumstances aside, the drawdown thus far in US equities isn’t yet anomalous, relative to any given year, on average.

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Zooming out, it is, thus far, just another item on the wall of worry. The US has a great deal of energy independence, and has, thanks to much more aggressive monetary and fiscal stimulus, a far stronger economic momentum behind it.

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That said, the current 12% drawdown isn’t nothing either, and more interestingly, many of the European equity market regions are experiencing a much stronger drawdown. The DAX (German bourse) is essentially in a bear market.

We are mindful of our 600 bp underweight to equities, and are happy to have a very small deployment of capital, from our defensive allocations, to growth.

And whilst not being interested in China, specifically, it is worth noting that many of the Asia/China indices/sub-indices, have been crushed over the past few months.

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