Jasper Thornton Boelman, investment director at Parmenion, told us that while his firm hasn't revised its overall view that the global economy is in the early stages of a decline, it has been shaking things up under the bonnet of its portfolios.
He told us that the cash from Parmenion's decision to cut US equity exposure has been deployed into sterling corporate bonds
Thornton Boelman says: "The yields on offer within Sterling Corporate Bonds are relatively attractive and look to be compensating investors well even when accounting for the potential risks of slowing economic growth ahead.
"Conversely, the US equity market appears fully valued, with the market anticipating the 'soft-landing' scenario. We see risk to the downside in this assumption, hence the reduction."
That reduction in US exposure mirrors that of the allocators we cover on our database, with the average exposure to US equity funds declining from 15.4 per cent to 14.3 per cent between May and December 2022 in the balanced portfolios we cover.
Of course that reduction could also be a function of the relatively weak performance of US equities against peers in 2022, rather than being active asset allocation decisions.
And as ever, there is a wide delta of exposures within that average, with Brewin Dolphin’s end of year exposure to US equity funds being 28.5 per cent, next highest is Abrdn at 23 per cent.
At the other end of the spectrum, Wise has zero allocated to US equity funds - preferring to use global equity funds - while Tacit has 5 per cent.
That cut was part of an overall reduction in Parmenion's equity holdings. Though one area they did increase recently is emerging markets, a decision they made principally on the basis of China's re-opening.
Parmenion was already stoutly overweight emerging markets prior to that, so its latest positioning means they are taking a bold view on the asset class indeed.
Thornton Boelman says: "We've looked to further benefit from the removal of zero-Covid restrictions in China by tilting portfolios further into the China A-Share market.
"The 'reopening' of China won't be without challenge, but the direction of travel is clear with respect to limitations being removed and policy being supportive of growth. Regulation around tech also appears to be softening, and with the recent derating, there is a strong investment case on various fronts."
Thornton Boelman adds that he continues to allocate to a bucket of what he calls diversified alternatives which he says he owns for defensive reasons, as a non-bond defensive exposure "is a valuable thing" at a time of rising interest rates.
