July 6, 2023 —
June was a strong month for QuantStreet, continuing our outperformance relative to a number of asset allocation benchmarks since launch.[1] In June, we were overweight US and technology stocks, with an allocation to international, non-US-dollar high quality bonds. We largely maintain this allocation for July, as we discuss further below.
New product offerings
We are excited to introduce two new product offerings:
- Financial Planning: We now actively help our clients think through their financial plans and provide a comprehensive assessment of their current holdings and recommended path forward.
- Model Portfolios: We offer model ETF portfolios via a subscription service. You can read more about our ETF models on our website. We are having a webinar to introduce this service next Wednesday, July 12 at 4 PM EST. Please join us by signing up here.
You can see all our services here.
Our research
Last month we did a deep dive into two topics.
- We looked at whether tech stocks are in a bubble (we don’t think so). This came out in two parts on Adviser Perspectives: Part 1 and Part 2.
- In our most recent piece, we analyze why healthcare stocks have been underperforming lately despite strong, long-term fundamentals.
If you would like to sign up to receive our research in real time, please sign up on our Substack site.
Positioning for the month ahead
Our portfolio allocation reflects a combination of price trend and our machine-learning-based return forecasting model. We maintain our tech exposure despite ever higher valuations because, in our view, the technological revolution that is under way will be transformational for our world. Valuations are, indeed, stretched. But according to some of our forecasting models, the impact of stretched valuations is offset by other factors (like earnings growth, lagged volatility, and price trend).
We retain a substantive allocation to Treasuries and non-US-dollar, high quality government debt. There are two reasons: First, the Fed seems likely to continue to raise its policy rate target, which will further slow economic growth and inflation, and will ultimately be good for longer-dated quality government debt; second, our bond positions provide a nice risk offset against our equity exposures.
[1] If you’d like to learn more about all of our holdings last month, or about QuantStreet’s performance since launch, please contact us and we’ll be glad to provide details.