Investment Committee – September 2023


Navigating Market Uncertainties:
Investment Committee’s September 2023 Review and Forward-Looking Strategies

The Investment Committee convened in September 2023 to review the decisions and proposals made in the third quarter 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:

Market Risks and Portfolio Strategy

The Committee expressed concerns about the shrinking risk premia for most assets due to the growing conformity in a “soft landing” approach to markets. The potential for higher-than-anticipated interest rates due to repricing for a hotter economy was identified as a risk that could weigh on global growth. Because of these concerns, the Committee remains committed to a cautious approach, favoring positive-carry trades and maintaining a longer-term investment horizon.

US Market Narrative and Global Growth

The Committee noted the divergent narratives in the US bond and equity markets, with the former predicting a recession and the latter displaying continued optimism. The Committee agreed on the need for nimbleness in this environment, acknowledging that one of these markets could prove wrong. Meanwhile, the slowing down of global growth and the peaking and subsequent decline of inflation in most countries were also discussed.

Investment Grade Bond Market

The Committee identified the medium-term investment grade bond market as the sweet spot for bond exposure, with an increase in model weights by 3.4% from July to September 2023. This positioning reflects the Committee’s cautious approach and its commitment to providing clients with the best possible investment strategies.

Performance Review and Asset Allocation

The Committee reviewed the performance of our core offerings against the overall market and discussed the asset allocation going forward. All our mandates have posted positive returns for the year, reflecting the effectiveness of our investment strategies.

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 July and September 2023, as well as the full minutes of the Committee’s discussions, can be found in separate articles.

Authors: John Couletsis and Kostas Metaxas