UK wealth manager Evelyn Partners and New York-headquartered Goldman Sachs Asset Management share their insights on the market environment and investment opportunities on the horizon for the remainder of the year.

Wealth and asset managers are taking a few risk chips off the table.

At a media roundtable this week, Goldman Sachs Asset Management underlined the need for a diversified approach across regions and asset classes in the second half of the year to mitigate market uncertainty and high volatility.

Timothy Braude, global co-head of multi-asset solutions (MAS) at Goldman Sachs Asset Management said he prefers a higher allocation to higher-quality credit in both traditional and private credit markets in this uncertain environment.

He highlighted the need for a diversified approach beyond the traditional 60/40 allocation to equities and bonds to a 60/30/10 allocation to stocks, bonds and alternatives. Braude said investors should have an allocation to hedge funds, private credit, and private real assets in their portfolios. He has seen opportunities in private credit, notably investment grade, as well as in hedge funds.

The views of Goldman Sachs, and others (see below) are coming out around the mid-year point of the year as wealth managers try to figure out asset allocation and strategy for the next six months and further out. A turbulent start to the year - US tariffs, geopolitical turmoil and uncertainty about interest rates - have encouraged shifts such as an exodus from certain US equities and move into European stocks and select international markets.

The Evelyn angle
UK-headquartered Evelyn Partners has recently made changes to its Active Managed Portfolio Service (MPS), and increased its allocation to alternatives. “Two new positions were introduced within the alternatives allocation through one absolute return fund position – Fulcrum Diversified Absolute Return  – and one listed infrastructure position – Cordiant Digital Infrastructure,” lead portfolio manager James Burns said. “Both these holdings should offer good diversification to the portfolios as we expect their return profiles to be driven by their own fundamentals rather than relying on positive equity markets.”

Fixed income
Simon Dangoor, partner in fixed income and liquidity solutions at Goldman Sachs Asset Management, sees opportunities in fixed income, notably in a two- to five-year duration. “It’s important to diversify exposure outside the US, with interesting opportunities in duration in the UK, Canadia and Scandinavia where interest rates are falling, as well as in emerging markets,” he said. “There is strong demand for duration. Dutch pensions funds have been big buyers of duration. Securitised credit is also good...It’s an interesting investment environment in Europe."

Burns has also increased his bond allocation. “The bond allocation saw some major changes with UK government bonds being increased at the expense of US government bonds,” he said. “We believe that UK gilts look more attractive than US treasuries as we see there being greater scope for growth concerns to come through in the UK which would lead to interest rate cuts, whilst the growth picture in the US remains more robust.”

“There is also the possibility that US government bonds’ status as the ultimate safe haven assets may be called into question following US President Donald Trump’s recent tariff announcements. Corporate bonds were also reduced as we see less downside protection in them versus government bonds,” Burns added.

Equities
Osman Ali, global co-head of quantitative investment strategies (QIS) at Goldman Sachs Asset Management, said that European equities have been outperforming US equities after the recent hike in the EU and Germany’s defense spending. But he believes that the recent strengthening of US equities will continue, notably in tech, in the second half of the year. Ali also sees good opportunities in European, Chinese and emerging market equities, but stressed the need to be stock selective. He said small-caps have also been performing well.  

At Evelyn, the firm has cut its equity allocation, Burns said. “Within the equity allocations, sizeable cuts were made to the UK and US whilst Europe, Japan and Asia/Emerging Markets generally saw increases. Two holdings were exited entirely – NinetyOne UK Alpha and Federated Hermes Global Emerging Markets – whilst the Vanguard Emerging Markets Stock Index fund, a tracker, was introduced,” he said. 

The Evelyn Partners Active MPS range includes investment companies as well as funds, and takes a flexible approach to rebalancing. Among the outsourced investment solutions Evelyn Partners provides to UK financial advisors, Active MPS sits alongside the Evelyn Partners Core MPS range which invests in funds and has a fixed rebalancing schedule, a sustainable MPS range and a low-cost Index MPS range which invest in passive funds and exchange-traded funds.

Earlier in June, French asset manager Carmignac highlighted that Europe and emerging markets are still underowned, underappreciated and undervalued, providing fertile hunting ground for stock pickers.