Asset Allocations

AugurMax Asset Allocation Changes 2020-10-02

A fairly conservative portfolio is prescribed for October as bonds increased a hefty twenty-seven percentage points and equities were reduced eight percentage points.  Within equities, there were sizable shifts out of Canadian and emerging market stocks and into US small caps.  US REITs were de-funded the most going from a substantial long to a neutral position.  Similarly, emerging market bonds went from a substantial long to a short as ten year treasuries and euro bonds picked up most of the intra-bond reallocation.  Ten year treasuries are now the largest weight in the portfolio with Tips running a close second.  AugurMax does not explicitly incorporate inflation forecasts, but the big Tips bet may indirectly portend higher inflation.  Even though junk bonds were a relative winner in the trailing month, its exposure continues to decline and now represents only a small weight.  While currencies were unchanged overall, the Yen and the Euro had huge increases sourced from the British pound and the Canadian dollar.  Commodities picked up slightly with gold getting an increase from oil.  Gold is now back in positive territory after being a short in September.  These asset allocation changes are largely influenced by our ECO methodology and performance results on stand-alone assets like gold and others are shown here.