The U.S. equity sleeve outperformed due to our stock selection in health care and information technology as well as our underweight in the energy sector.
The fixed income sleeve’s underperformance was driven partly by our overweight in corporate credit, specifically an overweight in the energy sector.
The environment for equities should continue to be favorable provided U.S. economic growth remains steady. However, we have assumed a more defensive positioning in fixed income.
Going forward, we are overweight equities versus fixed income as we believe that asset class offers better risk-adjusted opportunities at this juncture.