AugurMax Asset Allocation Changes 2025-10-31
Equity exposure was bumped up at the end of October as stocks continued to rally off their April 8th lows amidst earnings reports that did not disappoint. Despite a mid-month surge in the VIX, volatility settled down by month-end and most region’s stock moves were strong. Stocks dramatically outperformed the other broad asset classes especially currencies (the Japanese Yen was down big). As stock exposures were pushed up again, their 2025-10-31 weighting kept them above their longer term average. Bond exposures rose quite a bit and are above their long-term average weighting. The prescribed Currency exposure moved further negative — a negative Currency exposure suggests the dollar will outperform foreign currencies. Commodity exposure is positive and more or less in line with its longer term weighting.
Equity additions were highly selective with the UK, Euroland, and Emerging Markets receiving allocations. US Large Cap, US Small Cap, Canada, and Japan were cut. The VIX exposure rose a bit and its (small) long exposure essentially represents a hedge on the US stock market. Interest sensitive US REITs were pushed down again and now represent a short.
Bond exposures declined and a few bond asset classes with subtractions include Japan and US High Yield. US Investment Grade was added to the most. Cash exposure moved up a fair bit.
Within commodities, Corn was raised while Gold moved down a comparable amount.
Currency returns were down across the board in October. A higher dollar makes foreign goods less expensive so for the US consumer, any price increases from new tariffs will be mitigated somewhat by a higher dollar. No currency exposures were added to and the Mexican Peso Fell the most.
While domestic stock returns gained ground in October, uncertainties from the government’s ballooning deficit and the shutdown remain. Value stocks underperformed growth stocks, as the usual tech names held favor. Bonds were mixed around the globe but mostly up as some inflation measures abated and the FED cut short term rates. US Treasuries outperformed US Tips hinting at a more benign view on inflation fears (see breakeven inflation rates). While US Large Caps are more than 35% above their April 2025 lows (see worst drawdowns) many institutional investors have not participated in the rebound as concerns over budget deficits, valuations, and repercussions from US tariff threats persist. The prescribed changes are largely influenced by our ECO methodology. Performance results (on a stand-alone basis) for assets like Gold and others using our ECO metrics are shown here.
