{"id":9296,"date":"2025-02-24T16:08:49","date_gmt":"2025-02-24T21:08:49","guid":{"rendered":"https:\/\/www.guardiancapital.com/investmentsolutions\/?post_type=insight&p=9296"},"modified":"2025-02-24T16:08:49","modified_gmt":"2025-02-24T21:08:49","slug":"asset-mix-committee-feb-2025","status":"publish","type":"insight","link":"https:\/\/www.guardiancapital.com/investmentsolutions\/insights\/asset-mix-committee-feb-2025\/","title":{"rendered":"Asset Mix Committee (February 13, 2025)"},"content":{"rendered":"

Decision by Committee (February 13, 2025)<\/strong><\/p>\n

This commentary is authored by the Guardian Capital LP Asset Mix Committee (AMC)1<\/sup><\/p>\n

The global macroeconomic data flow has generally turned for the better since the AMC last met in December, with growth momentum showing increasing signs of broadening out beyond the US, while the American economy appears to remain on solid footing. Against the improved growth trajectory and firming in job markets, inflation has proven somewhat sticky in recent months which has, in turn, led to a shallower expected path for monetary policy that includes fewer rate cuts than previously assumed.<\/p>\n

While this represents a pretty upbeat backdrop for markets, the rhetoric and persistent threat of aggressive tariffs being put in place by the new US Administration in the White House has driven a material increase in uncertainty that looms large over the outlook with the potential for significant negative implications.<\/p>\n

Despite this, however, markets have, so far, taken everything in stride \u2014 perhaps because the most severe threats have not yet come to fruition. The fact that the market is not evidently demanding a higher risk premium at the moment, however, suggests that there is a degree of complacency in the marketplace that could prove problematic in the face of elevated headline risks and related volatility.<\/p>\n

With that said, the extremely limited market breadth seen over the last two years suggests that company valuations, in general, may not be as elevated as would otherwise be the case \u2014 and this is particularly the case against indications of a broadening improvement in earnings momentum.<\/p>\n

Further on this topic, a notable recent development has been the narrowing of the performance gap as the stocks of the group of mega-cap US Tech-adjacent companies (aka, the \u201cMagnificent 7\u201d2<\/sup>), which had previously been the driving force of markets, have lagged following the release of Chinese innovations in the artificial intelligence space \u2014 and this despite still reporting solid earnings.<\/p>\n

While the Magnificent 7 stocks may prove to be safe havens should volatility pick up in earnest, absent a shock, there appears to be scope for a further narrowing of the performance gap going forward as the positive economic and earnings momentum and more favourable valuations support a broadening out of returns.<\/p>\n

While the AMC is cognizant of the risks posed by the heightened uncertainty at the moment, it felt comfortable with its exposures to Equity and Fixed Income, and allocations within the asset classes. Accordingly, the decision was made to leave allocations unchanged.<\/p>\n

The AMC\u2019s asset allocations remain overweight Equity with a bias toward Global \u201cquality growth\u201d strategies. Fixed Income allocations are skewed toward high-quality corporate credit with below benchmark duration. The AMC will continue to monitor economic and market developments closely and stands ready to tactically exploit opportunities that may present themselves.<\/p>\n

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Asset Mix Committee Summary Views3<\/sup><\/strong>
\nGrowth Asset Allocation<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Fund<\/strong><\/th>\nBenchmark*<\/strong><\/th>\nNew Target Allocation**<\/strong><\/th>\nChanges from pre-decision positioning**<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Equity<\/strong><\/td>\n70.0%<\/strong><\/td>\n78.2%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Canadian Equity<\/strong><\/td>\n40.0%<\/strong><\/td>\n39.3%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Canadian Equity<\/td>\n<\/td>\n13.8<\/td>\n–<\/td>\n<\/tr>\n
Canadian Growth Equity<\/td>\n<\/td>\n13.0<\/td>\n–<\/td>\n<\/tr>\n
Canadian Focused Equity<\/td>\n<\/td>\n9.4<\/td>\n–<\/td>\n<\/tr>\n
Canadian Equity Income<\/td>\n<\/td>\n3.2<\/td>\n–<\/td>\n<\/tr>\n
Global Equity<\/strong><\/td>\n30.0%<\/strong><\/td>\n38.9%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Global Dividend Growth<\/td>\n<\/td>\n12.5<\/td>\n–<\/td>\n<\/tr>\n
US All Cap Growth<\/td>\n<\/td>\n10.6<\/td>\n–<\/td>\n<\/tr>\n
Fundamental Global Equity<\/td>\n<\/td>\n10.5<\/td>\n–<\/td>\n<\/tr>\n
Emerging Markets Equity<\/td>\n<\/td>\n2.5<\/td>\n–<\/td>\n<\/tr>\n
US Equity Select<\/td>\n<\/td>\n2.0<\/td>\n–<\/td>\n<\/tr>\n
Japan Value Equity Index ETF<\/td>\n<\/td>\n0.9<\/td>\n–<\/td>\n<\/tr>\n
Fixed Income<\/strong><\/td>\n25.0%<\/strong><\/td>\n21.8%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Investment Grade Corporate Bond<\/td>\n<\/td>\n13.6<\/td>\n–<\/td>\n<\/tr>\n
Canadian Bond<\/td>\n<\/td>\n8.2<\/td>\n–<\/td>\n<\/tr>\n
Cash<\/strong><\/td>\n5.0%<\/strong><\/td>\n0.0%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

*Benchmark= portfolio strategic asset allocation **Figures may not add up due to rounding<\/p>\n

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Conservative Asset Allocation<\/strong><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Fund<\/strong><\/th>\nBenchmark*<\/strong><\/th>\nNew Target Allocation**<\/strong><\/th>\nChanges from pre-decision positioning**<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Equity<\/strong><\/td>\n30.0%<\/strong><\/td>\n33.5%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Canadian Equity<\/strong><\/td>\n17.5%<\/strong><\/td>\n\u00a017.2%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Canadian Equity<\/td>\n<\/td>\n6.0<\/td>\n–<\/td>\n<\/tr>\n
Canadian Growth Equity<\/td>\n<\/td>\n5.7<\/td>\n–<\/td>\n<\/tr>\n
Canadian Focused Equity<\/td>\n<\/td>\n4.1<\/td>\n–<\/td>\n<\/tr>\n
Canadian Equity Income<\/td>\n<\/td>\n1.4<\/td>\n–<\/td>\n<\/tr>\n
Global Equity<\/strong><\/td>\n12.5%<\/strong><\/td>\n16.3%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Global Dividend Growth<\/td>\n<\/td>\n5.2<\/td>\n–<\/td>\n<\/tr>\n
US All Cap Growth<\/td>\n<\/td>\n4.4<\/td>\n–<\/td>\n<\/tr>\n
Fundamental Global Equity<\/td>\n<\/td>\n4.4<\/td>\n–<\/td>\n<\/tr>\n
Emerging Markets Equity<\/td>\n<\/td>\n1.0<\/td>\n–<\/td>\n<\/tr>\n
US Equity Select<\/td>\n<\/td>\n0.8<\/td>\n–<\/td>\n<\/tr>\n
Japan Value Equity Index ETF<\/td>\n<\/td>\n0.4<\/td>\n–<\/td>\n<\/tr>\n
Fixed Income<\/strong><\/td>\n65.0%<\/strong><\/td>\n66.5%<\/strong><\/td>\n–<\/strong><\/td>\n<\/tr>\n
Investment Grade Corporate Bond<\/td>\n<\/td>\n25.0<\/td>\n–<\/td>\n<\/tr>\n
Canadian Bond<\/td>\n<\/td>\n41.5<\/td>\n–<\/td>\n<\/tr>\n
Cash<\/strong><\/td>\n5.0%<\/strong><\/td>\n0.0%<\/strong><\/td>\n –<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

*Benchmark= portfolio strategic asset allocation **Figures may not add up due to rounding<\/p>\n

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1 <\/sup>Guardian\u2019s Asset Mix Committee (AMC) consists of investment professionals and asset class specialists and is charged with overseeing the development and management of multi-asset investment portfolios, specifically addressing asset allocation and areas for advice or communication to such clients as it relates to the makeup of their portfolio.<\/em>
\n2 <\/sup>Apple, Amazon, Google. Meta, Microsoft, NVIDIA, Tesla<\/em>
\n3 <\/sup>These Asset Allocations represent the Asset Mix Committee\u2019s tactical views given their assessment of market conditions and performance expectations.<\/em><\/p>\n

This commentary is for general informational purposes only and does not constitute investment, financial, legal, accounting, tax advice or a recommendation to buy, sell or hold a security. It shall under no circumstances be considered an offer or solicitation to deal in any product or security mentioned herein. It is only intended for the audience to whom it has been distributed and may not be reproduced or redistributed without the consent of Guardian Capital LP. This information is not intended for distribution into any jurisdiction where such distribution is restricted by law or regulation.<\/strong><\/p>\n

The opinions expressed are as of the date of publication and are subject to change without notice. Assumptions, opinions and estimates are provided for illustrative purposes only and are subject to significant limitations. Reliance upon this information is at the sole discretion of the reader. The opinions expressed are as of the published date and are subject to change without notice. Assumptions, opinions and estimates are provided for illustrative purposes only and are subject to significant limitations. Reliance upon this information is at the sole discretion of the reader. This document includes information concerning financial markets that were developed at a particular point in time. This information is subject to change at any time, without notice, and without update. This commentary may also include forward-looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Investing involves risk. Equity markets are volatile and will increase and decrease in response to economic, political, regulatory and other developments. Investments in foreign securities involve certain risks that differ from the risks of investing in domestic securities. Adverse political, economic, social or other conditions in a foreign country may make the stocks of that country difficult or impossible to sell. It is more difficult to obtain reliable information about some foreign securities. The costs of investing in some foreign markets may be higher than investing in domestic markets. Investments in foreign securities also are subject to currency fluctuations. The risks and potential rewards are usually greater for small companies and companies located in emerging markets. Bond markets and fixed-income securities are sensitive to interest rate movements. Inflation, credit and default risks are all associated with fixed-income securities. Diversification may not protect against market risk and loss of principal may result. Index returns are for information purposes only and do not represent actual strategy or fund performance. Index performance returns do not reflect the impact of management fees, transaction costs or expenses. Certain information contained in this document has been obtained from external parties, which we believe to be reliable, however, we cannot guarantee its accuracy.<\/p>\n

Guardian Capital LP manages portfolios for defined benefit and defined contribution pension plans, insurance companies, foundations, endowments and investment funds. Guardian Capital LP is wholly owned subsidiary of Guardian Capital Group Limited, a publicly traded firm listed on the Toronto Stock Exchange. For further information on Guardian Capital LP, please visit www.guardiancapital.com<\/a>.<\/a> All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.<\/p>\n

Published: February 24, 2025<\/p>\n