Rebalancing Toward Real Assets to Mitigate Concentration Risk

A small number of constituents are increasingly dominating the S&P 500, and history shows that high levels of concentration can lead to larger drawdowns. An allocation to real assets may offer solutions through lower correlations and betas compared to the biggest S&P 500 names, while still participating in broader market gains. For these reasons, investors should consider allocating a portion of their portfolios to real assets, which can help mitigate portfolio concentration risk while enhancing resilience. This quarter’s newsletter examines these observations, highlighting key themes driving fundamentals and opportunities across different regions and subsectors within our flagship investment strategies.

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