June 04, 2020

Portfolio positioning for a recovery scenario

Talley Léger. Investment Strategist

In response to numerous client questions about portfolio positioning for a recovery scenario, we provide a historical perspective on stock market, sector, size, style and regional allocations. Also, we juxtapose typical recovery performance trends against recent price action.

At present, we observe that some performance trends—for now, at least—do hint at a potential recovery, including the recent outperformance of stocks relative to bonds, cyclical sectors relative to defensive ones and small market capitalization stocks relative to their large counterparts.

However, some other trends suggest it may be too soon to expect a durable change in leadership, namely in the form of growth continuing to outperform value and developed markets still outperforming their emerging competitors.

Whether the recovery began a month ago or it begins a month or more from now, we help investors look across the valley to better times ahead and position their portfolios for optimistic, long-term outcomes.

To learn more, check out the charts.

Related insights: Quantifying the earnings impact of COVID-19

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