AugurMax Asset Allocation Changes 2025-03-31
Equity exposure was kept the same after stock returns in February once again underperformed the other broad asset classes. Stocks remain the largest broad asset class but re-allocations at 2025-02-28 brought them below their longer term average weighting. Bond exposures fell after several months of increases and are more or less in line with their long-term average weighting. The prescribed Currency exposure rose and now represents a long. This positive Currency exposure suggests the dollar will underperform foreign currencies. Commodity exposure was essentially unchanged and Commodities have an essentially neutral weighting.
Most equity regions experienced cutbacks with Australia being a notable exception. The VIX exposure was unchanged and has a zero weight. Interest sensitive US REITs were unchanged.
Bond exposures were raised in a few bond asset classes with big additions to Ten Year Treasuries and Tips. US High Yield Bonds were cut the most. Cash exposure was unchanged.
Within commodities, Oil was bumped up while the Corn exposure dropped.
Currency returns were all up in February. A lower dollar makes foreign goods more expensive so for the US consumer, any price increases from new tariffs will be exacerbated by a lower dollar. The Aussie Dollar and the Canadian dollar were added to; no currencies were cut.
Domestic Stock returns were weak in March and were subject to big swings from the Trump regime’s threats. Within the stock market, there was a continued reversal of fortune in many Technology and Consumer Discretionary stocks. Moreover, most of the previous growth stock winners were spurned in favor of underperforming value stocks in Health Care and Utilities. Bonds were mostly down around the globe as some inflation measures resurfaced. US Tips beat US Treasuries hinting at higher inflation fears (see breakeven inflation rates). While US Large Caps are more than 60% above their October 2022 lows (see worst drawdowns) a fresh drawdown was added to the list due to the repercussions from US tariff threats and possible reprisals. 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.
