Girard, a Univest Wealth Division: Zeroing in On Quality<\/a><\/p>\nIn a balanced portfolio, on the equity side, we would have a range from 45% to 60% in equities. That would include domestic and international equities. On the domestic side, it would [range] from large cap all the way down to micro-cap. On the international side, it would be developed, as well as in emerging markets.<\/p>\n
On the fixed-income side, it would be a range of 25% to 35%, depending on where we are on the other sides of the equation. The fixed income would include either taxable or tax-free bonds, international bonds, high-yield exposure and some other areas that we define as satellite fixed income. That could include convertible bonds, for example, where we think there are opportunities.<\/p>\n
Typically, we would have alternative assets at around 10% to 15% of our allocations, depending on the client\u2019s risk tolerance. That would include commodities, infrastructure and some multi-strategy alternative funds that would include managed futures and really broad alternative strategies that would have different correlations.<\/p>\n
We stay fully invested and are not trying to make market timing or cash allocation calls, so we will shift our allocations between asset classes, but we stay fully invested at all times.<\/p>\n
WM: On the alternative side, do you invest through evergreen funds, or do you try to stay with traditional private market funds?<\/p>\n
ET: We like liquid or semiliquid funds for our asset allocation model. Interval funds are also something we will look at. We like the transparency that these have, we like the liquidity, and the fees have been rationalized, so they are much more fitting to our strategies.<\/p>\n
The institutional ownership [of the fund] is important. If we are identifying funds that might not be as large as some others, we want to make sure that they have institutional caliber ownership fees and a consistent approach and process.<\/p>\n
WM: Do you invest in equities and fixed income using third-party managers as well?<\/p>\n
ET: Absolutely. The team has a deep understanding of both equity and fixed income markets, so we invest not only in third-party funds, but in separate account managers. We do a thorough review at the holdings level to look at style and factor exposures. We have clear benchmarks in evaluation criteria, so we know the risk budget and the amount of active share that the manager is taking relative to the benchmark. If we do not have any particular insight into an asset class, we will fully consider some of the low-cost index funds to get the beta exposure rather than trying to identify an active fund or active manager.<\/p>\n
WM: Do you use direct indexing?<\/p>\n
ET: We do limited direct indexing currently. We do employ active tax-loss harvesting approaches and have a dynamic tax-aware investment approach. It incorporates our capital markets assumptions and our asset class views. We\u2019ve done a lot of that really advanced tax management through our process. We\u2019ve used direct indexing in overlay strategies, on a limited basis at this point, and have done more around incorporating tax- loss harvesting in our asset allocation process.<\/p>\n
WM: Do you have any allocations to crypto assets, either directly or through ETFs?<\/p>\n
ET: No, we don\u2019t. It\u2019s because of the volatility associated with them, and there is really not a long history of being able to study the asset class and how it responds to various market conditions, as well as how it may or may not correlate with other areas of the market. There is not enough of a runway for us to make those allocation decisions at this point.<\/p>\n
WM: How often do you review your portfolio allocations?<\/p>\n
ET: We make capital market assumptions and look at the intermediate horizon, which we classify as about 18 months to three years. There is enough change in the capital markets and the economy over that time that it gives us the opportunity to make an informed decision, and we can see that play out. It also allows us to have capital gains go long-term in many cases. [This approach] is not too short-term in nature, but not so long-term that we are not able to be responsive to market dynamics.<\/p>\n
WM: When was the last time you made any significant changes to your allocations?<\/p>\n
ET: We are in the process of doing that now. We\u2019ve been coming up with new capital markets assumptions across asset classes, looking at the history, the volatility and the correlations now. We anticipate rolling out new global asset allocation strategies later this year.<\/p>\n
We think that this broadening out of the market that we\u2019ve witnessed over the past 12 months will continue, so you will see a broadening out of asset classes. We think that will add value not only in terms of the asset allocation decisions, but also in the manager and fund selection relative to the broader market indices.<\/p>\n
WM: What are your biggest concerns in today\u2019s market?<\/p>\n
ET: The degree of concentration in the market remains extremely high. As we know, large cap growth and technology have dominated market returns over the past four or five years. The S&P is at the highest levels of concentration in the history of capital markets. And the concentration is not just around the companies, but around the same theme of AI, and that requires us to diversify and have exposures that are not necessarily all tied to the same investment theme. And it\u2019s important to know that the AI theme has broadened beyond just the Magnificent Seven. It now includes utility companies and semiconductor companies that are tied to the expansion and development of AI. We want to make sure that if anything goes wrong or there is a slowdown or some idiosyncratic event, we have enough diversification in our strategies to help protect investors.<\/p>\n
WM: Where do you see the biggest opportunities?<\/p>\n
ET: Beginning in June of 2025, you started to see small-cap outperformance. That has been a healthy market. It\u2019s allowed for companies to benefit from lower rates. They are also seeing productivity enhancement from the new technology. We think that will continue. It\u2019s not as easy with potentially higher rates on the horizon, but the broadening out that we\u2019ve seen would have to take place if the promise of AI technology will continue.<\/p>\n
We\u2019ve also seen it internationally, where international developed markets became extremely cheap and offered good value. Emerging markets have also shown a rebound, and many of those benefited from higher energy prices. Finally, we also saw that the potential trade and tariff policies did not have as much of a negative impact on many international markets as was expected on liberation day. So, there has been a strong relief rally in many of the international markets.<\/p>\n","protected":false},"excerpt":{"rendered":"As CIO of First Horizon Wealth Management, Eric Teal oversees portfolio strategies for a wide range of constituents.…\n","protected":false},"author":2,"featured_media":631750,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":["post-631749","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/631749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=631749"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/631749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/631750"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=631749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=631749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=631749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}