From the consultants’ desk: Investment portfolio construction trends at midyear

Natixis Investment Managers Solutions portfolio consultants evaluate model portfolios submitted by wealth managers and institutional clients. From the Consultants' Desk highlights allocation trends and observations derived from portfolios analyzed during the most recent quarter. Investment portfolio consultants Kevin McCullough and Mark Cintolo discuss macro and market trends that influenced asset allocation shifts in advisor and institutional portfolios.

• Challenging market conditions during the first half of the year offered few opportunities for asset allocators. A few alternative categories did provide diversification.
• There is evidence that the equity market may be shifting from fear of inflation to fear of decelerating growth and recession.
• In fixed income, inflation and rising rates are still the primary drivers, but the worst may finally be behind us.
• Higher interest rates led to gains in funded status for US corporate defined benefit plans.
• Institutional investors continued to see slight fee reductions across actively managed US and non-US large capitalization equity categories.