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Investment Managers Securities Analysts

Bermuda & Cayman

CONCLUSION AND STRATEGY POINTS

Equities and Bonds Strategy

EQUITIES
(50% S&P Global 1200 and 50% S&P 500)

Regional Strategy

  • Underweight North America at 74.4 percent (versus Benchmark weighting of 79.7 percent).
  • Equal Weight Europe at 12.5 percent.
  • Equal Weight Japan at 3.6 percent.
  • Overweight Emerging Asia and Latin America at 5.5 percent and 1.5 percent, respectively (versus Benchmark weighting of 2.2 percent and 0.5 percent, respectively).

Sector Strategy

  • Overweight Health Care, Industrials, and Energy at 14.2 percent, 10.5 percent, and 6.3 percent, respectively (versus Benchmark weighting of 13.2 percent, 10.0 percent, and 5.4 percent, respectively).
  • Equal Weight Technology, Communication Services, Consumer Staples, Materials and Utilities at 19.0 percent, 9.5 percent, 7.9 percent, 3.8 percent, and 3.3 percent, respectively.
  • Underweight Financials, Consumer Discretionary, and Real Estate at 12.7 percent, 9.6 percent, and 0.7 percent, respectively (versus Benchmark weighting of 14.7 percent, 10.1 percent, and 2.9 percent respectively).

Currency Strategy

  • Underweight the euro at 5.6 percent (versus Benchmark weighting of 7.1 percent).
  • Underweight the US dollar at 77.6 percent (versus Benchmark weighting of 78 percent).
  • • Equal weight the yen at 3.8 percent.

BONDS

  • Hold highly liquid US Treasuries maturing in four-to-five years to benefit from a decline in yields.
  • Hold floating rate notes for their relative yield advantage over US Treasuries.
  • Maintain a modest duration underweight on the risk that markets could price in higher inflation on the back of wage increases and rising yields.