Asset Allocation Viewpoints & Positioning Q4 2020 Update

Accelerating growth and inflation coupled with rising interest rates.

Update to the Q4 2020 Asset Allocations Viewpoints

Updated Perspectives

• Harbor’s Multi-Asset Solutions Team (MAST) is retaining a pro-cyclical posture in the portfolio with an equity overweight (o/w) and duration underweight (u/w). 
• The team is shifting its emerging markets (EM) equity o/w to a small u/w, EAFE moves to an o/w, and the U.S. moves to a larger o/w. 
• MAST expects both nominal and real rates to rise further over 2021 which should act as a headwind for EM due to external debt and reduced USD liquidity. 
• MAST is also moving to an underweight position in U.S. growth and an overweight position in U.S. value. U.S. value has strong leverage to interest rates, inflation and growth – all of which we expect to move higher this year – and also continues to look inexpensive.

Source: Bloomberg, February 2021

Legal Notices & Disclosures

The views expressed herein are those of the Harbor Multi Asset Solutions Team at the time the comments were made. They may not be reflective of their current opinions, are subject to change without prior notice, and should not be considered investment advice. These views are not necessarily those of the Harbor Investment Team and should not be construed as such. The information provided is for informational purposes only.

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