Note: Any reference to portfolio positioning relates to our flagship core discretionary portfolios. Clients invested in other strategies, or in bespoke and advisory portfolios, should consult their Client Advisor.
What you need to know
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We’re increasing our US equity exposure, funded by selling developed market minimum-volatility equities. Why? Because stronger US economic growth, solid earnings, policy stimulus and the AI investment cycle all have the potential to support near-term US equity performance.
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To offset any dollar weakness, we’re buying ‘hedged’ US equities, which take out currency effects. And to partly cushion the impact of volatility, we also use ‘insurance’ strategies where permitted, investing in instruments that appreciate if US equities fall.
Daniele Antonucci
Daniele Antonucci is a managing director, co-head of investment and chief investment officer at Quintet Private Bank. Based in Luxembourg, he jointly chairs the investment committee, owning decision-making and performance outcomes. As head of research, Daniele oversees the investment strategy feeding into portfolios and the teams of specialists across asset classes and solutions, ranging from macro, fixed income and equities to funds, alternatives, and structured products and derivatives. He leads the network of chief strategists, communicating the house view on the economy and markets to financial advisors, clients and the media.
Prior to joining Quintet in 2020 as chief economist and macro strategist, Daniele served as chief euro area economist at Morgan Stanley in London. He completed the High Performance Leadership Programme at Saïd Business School, University of Oxford, holds a master’s degree in economics from Duke University and graduated from the Sapienza University of Rome. Featured in The Economist and Financial Times and often quoted in the generalist press, he’s a published author in finance and economics journals and investment magazines, a frequent speaker on CNBC and Bloomberg TV, and an ECB Shadow Council member.
What a difference a few months make
The final stretch of the year is always a good time to pause and reflect. What’s gone as expected? What has surprised us? And what does that mean for portfolio positioning?
Right now, the US economy is holding up better than many feared. After a volatile first half of the year, distorted by tariff-related swings in trade, growth has regained momentum as trade policy became clearer. Earnings are solid, and the next phase of policy looks tilted towards tax cuts and deregulation – both supportive for markets.
At the same time, the US Federal Reserve (Fed) has started cutting interest rates again, and we expect more cuts in the months ahead. The latest cut wasn’t a surprise, but there’s a growing conviction behind further cuts amid signs of cooling job growth.
The latest piece of news grabbing the headlines is about the US government shutdown. Provided that its short-lived, history suggests little economic impact, though it does cloud visibility as key data releases are paused.
Meanwhile, the AI investment cycle is in full swing. US spending on data centres and intellectual property is booming and now surpasses traditional capital expenditure on machinery and equipment. Put simply, this isn’t just hype. It’s a genuine structural trend that deserves a place in portfolio strategy.
Adding to US equities while managing risks
Against this backdrop, we’ve decided to increase our US equity exposure. The Investment Committee and I believe the mix of fiscal support, easier monetary policy and resilient earnings could lift US equity markets further. Our US economic growth forecasts are now above consensus.
The AI-driven capital expenditure boom adds a powerful tailwind. It’s transforming business investment and productivity, and we think the market still underestimates its long-term potential. Together, these forces suggest US equities could outperform in the near term.
To fund this move, we’re closing our minimum-volatility equity position. Those strategies, while useful in more fragile markets, tend to lag in stronger ones. They’re often more tilted towards healthcare – a sector we’re now more cautious about. And they don’t fully protect against drawdowns; they simply fall a bit less.
We’re also further hedging our US dollar exposure, stripping out the impact of exchange rate changes. With the Fed cutting rates while the Bank of England and the European Central Bank hold steady – and with large US fiscal deficits – the dollar looks vulnerable. Hedging helps sterling investors mitigate the dollar’s drag on performance.
What about US equity valuations? They’re high, yes, but not extreme. Earnings, especially in tech, are strong enough to support them. Still, diversification across investment styles and sectors is more important than ever as market leadership is narrow. That’s why, earlier this year, we diversified some of our US equities using an equal-weighted index that gives more room to sectors poised to benefit from fiscal stimulus and deregulation, such as industrials and financials.
Finally, where appropriate, we’re adding a form of portfolio ‘insurance’ – a warrant that rises if US equities fall (where client knowledge and experience, and regulations and investment guidelines, permit). It’s not a silver bullet, but it helps partially cushion unexpected shocks for investors comfortable with more complex instruments.
Portfolio diversification remains key
Tactically, we continue to prefer equities to bonds. Alongside our US tilt, we maintain broad equity exposure across regions – with tactical overweights relative to our long-term allocation targets in Europe, UK, Japan and emerging markets.
In fixed income, we favour European and UK bonds over their US counterparts. Inflation in the US and UK remains sticky. We’re holding strategic positions in commodities and inflation-linked bonds to mitigate the risk of persistent inflation. Gold also plays its role as a store of value in geopolitically uncertain times, especially when investors question the independence of the Fed and the credibility of US institutions. That’s why we’re overweight.
Putting it all together, this is a strategy designed to compound returns – capturing the opportunities we see and guarding against the risks we believe matter for investors.
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Information correct as of 8 September 2025.
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