Asset allocation chart December 2013

Jeffrey Knight, CFA, Head of Global Asset Allocation | January 6, 2014

Updates from previous allocations:

  • We remain modestly overweight equities because we expect them to outperform bonds as central banks remain accommodative. Leading indicators are improving, suggesting better global growth ahead. We expect cash and fixed income to underperform and we also continue to favor absolute return strategies.
  • We remain underweight U.S. equity allocations mainly on relative valuation. We see potentially better opportunities in select international equities.
  • We continue to favor the UK and eurozone on better economic momentum; short-term valuations have run up a bit, but still supportive longer term.
  • We moved to strong overweight to Japan on favorable monetary and macro conditions.
  • We remain neutral on emerging market (EM) equities. While global liquidity is high as U.S. monetary conditions are supportive in the short term, valuations supportive, somewhat stable macro conditions, but sentiment remains negative.
  • We remain underweight to the securitized sector on valuation concerns and potential sell-off as tapering begins. We remain modestly overweight to EM and high-yield bonds.
  • We remain underweight to commodities as the supply-demand picture remains weak, roll yields have turned negative and the ETF sell off continues.

Asset allocation chart December 2013

Source: Columbia Management Investment Advisers, LLC. Investment Strategy Outlook reflects the views of the Global Asset Allocation team as of December 13, 2013. Asset classes are ranked from 1 (overweight) to 5 (underweight), with 3 representing a neutral allocation.