When it comes to fixed-income, State Street is avoiding countries such as Turkey and South Africa since they’re more vulnerable fiscally and from a trade standpoint. Indeed, sovereign bonds remain one of the firm’s largest underweight positions because they’re not quite as attractive as stocks, according to Heinel.
“There are lots of other geopolitical threats that are creating headwinds,” she said. “Even with all these changes, we have an aggregate overweight to equities in the 6 to 7 percent range. So where we’re taking that overweight has shifted, but we’re still overweight equities broadly.”
This article was provided by Bloomberg News.