AugurMax Asset Allocation Changes 2025-04-30
Equity exposure was raised after stocks wound up the month basically flat. The month was marked by extreme volatility but ultimately experienced a dramatic v-shaped recovery. Stocks once again underperformed the other broad asset classes but beat commodities. Stock exposures moved up considerably and re-allocations at 2025-04-30 brought them more in line but below their longer term average weighting. Bond exposures were also raised and are also more or less in line with their long-term average weighting. The prescribed Currency exposure dipped quite a bit but still represents a long. This positive Currency exposure suggests the dollar will underperform foreign currencies. Commodity exposure went negative.
Equity additions were highly selective with US Large Caps, UK, and Emerging Markets getting the most. The VIX exposure was essentially unchanged. Interest sensitive US REITs were also unchanged.
Bond exposures were raised in a few bond asset classes with big additions to US High Yield, Europe Bonds, and Gilts. US Tips were cut the most. Cash exposure dropped.
Within commodities, Gold and Oil were defunded.
Currency returns were mostly up across the board in April. 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. Most currencies were reduced with the Swiss Franc and the Canadian dollar moving down the most.
Domestic Stock returns whipsawed big time in April from the Trump regime’s policy actions/threats. Within the stock market, there was tremendous dispersion in returns as winners one day became giant losers the next. While growth stocks beat value stocks, there was such volatility that any conclusions could be considered noise. Bonds were mixed around the globe as some inflation measures abated but volatility held sway as the trade wars unfolded. US Treasuries beat US Tips hinting at lower 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 (troughing 2025-04-08) was added to the list due to the repercussions from US tariff threats and possible retaliations. 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.
