Allocation Update

Find timely intelligence to inform your portfolio positioning right now. Touchstone conducts deep dive analyses of specific asset classes and offers asset allocation guidance using different approaches that are designed to add value for financial professionals and their clients. While certainly not exhaustive, these fresh perspectives include not only historically significant findings, but they also incorporate more recent trends or ideas about important market or economic environments - the culmination of which can serve as a solid framework for discussion and consideration.

Fixed Income Monthly

Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Tim Paulin, CFA

Spreads are Tight: Corporate credit spreads are near their tightest levels in over a decade. While strong fundamentals support this, waning confidence in Treasuries may also be at play. The AAA corporate index yield trades at only a slight premium to Treasury yields of similar maturity today, with some short-term corporate yields trading at negative spreads. By contrast, ABS, MBS, and CMBS spreads remain closer to fair value, making them attractive alternatives.

Allocation Update

Asset Allocation Chart of the Month

Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Tim Paulin, CFA

We believe the backdrop for small caps warrants consideration for investors who are looking for diversification and potential outperformance.

Allocation Update

International Equities Monthly

Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Tim Paulin, CFA

Fund flow data indicate that foreign investors have been reallocating away from U.S. equities. Traditional headwinds such as currency volatility and expanding valuation discounts are easing and may even become tailwinds. With these pressures subsiding, we believe international markets are better positioned to compete with U.S. equities.

Allocation Update

Touchstone Asset Allocation Guidance

Touchstone Asset Allocation Committee

We believe we can add value by adjusting portfolio weights in response to changing market conditions and in anticipation of changing fundamentals. History demonstrates that risk assets move through repeated boom and bust cycles. While the economic cycle influences these cycles, they do not necessarily overlap with the risk asset cycle.

Allocation Update

Domestic Equity Monthly

Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Tim Paulin, CFA

We see a more evenly balanced market environment. However, with visibility limited and valuations stretched in parts of the market, our conviction levels remain low. We believe steady positioning and selectivity are warranted.

Allocation Update