Super funds weigh defensive moves v opportunistic plays

InvestorDaily

Mercer has taken a more cautious stance on global markets, trimming its exposure to international equities and increasing its allocation to the euro, as geopolitical uncertainty and elevated valuations prompt a rethink of positioning. Darren Spencer, lead investment director for Mercer Pacific, said the moves are part of the firm’s dynamic asset allocation process and aim to shore up portfolios against potential downside risks. “Given robust returns across share markets over recent years, we have taken actions over the last few months that would potentially benefit portfolios in the event of a market downturn,” Spencer told InvestorDaily.

This includes “moderately reducing” its exposure to global equities, which Spencer confirmed includes US equities. Instead, the fund is bullish on global real estate and Japanese equities, while also remaining overweight Australian government bonds. Moreover, Spencer said Mercer is adding exposure to the euro, which has seen some of its strongest levels in three years after benefiting from recent announcements on European fiscal spending.

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