(Harvest) When Neuberger Berman’s Asset Allocation Committee calibrated its views on the 12-month return outlook last month, it settled on an underweight view for U.S. equities for the first time since the aftermath of the financial crisis.
In past cycles, such a view would not have raised many difficulties. If equity valuations are high, that implies that investors favor equities over bonds. That in turn implies relatively low bond prices, leaving decent yields for those who want to use them as an effective portfolio diversifier to dial down risk. But this time bonds are even more expensive than equities. Where can investors go to balance their exposures?
