Investment Committee – July 2023


Balancing Risk and Opportunity:
Investment Committee’s July 2023 Review and Prudent Investment Approaches

The Investment Committee convened in July 2023 to review the decisions and proposals made in the first half of the year, and to discuss the current market environment and its implications on our investment strategies. The Committee’s discussions were centered around the following key areas:

Model Weights Adjustments

The Committee voted on adjustments to the model weights for July 2023. The changes included a significant increase in cash allocation, a slight decrease in fixed income, and a marginal reduction in equities. The allocation to alternatives was also moderately increased. These changes reflect the Committee’s conservative stance in the current market environment.

Market Risks and Portfolio Strategy

The Committee expressed concerns about the current market valuations, which make the market upside less attractive. We favor positive-carry trades and remain cautious due to the potential risks. It is important to note that successful investing requires a longer-term horizon, thus time-in-the-market is more important than timing-the-market.

Potential Triggers for Higher Equity Volatility

The Committee discussed several factors that could potentially trigger higher equity volatility towards the end of the year. These include low correlations amongst index constituents, potential changes in the macro environment, and the possibility of a market regime change triggered by a shift in the expected future path of US$ interest rates.

In Conclusion

The Committee remains committed to monitoring these developments and adjusting its recommendations as necessary. By maintaining a cautious approach and adapting our portfolio strategy to the current market conditions, we strive to provide our clients with the best possible investment strategies and portfolio performance.

The detailed changes in the model weights for June and July 2023, as well as the full minutes of the Committee’s discussions, can be found in separate articles.

Authors: John Couletsis and Kostas Metaxas