Investment Strategies
Brown Shipley Cuts US Equity, Focuses On Diversification

The UK private bank is focusing on different forms of diversification to handle the uncertainties of the current market environment.
Brown Shipley,
a UK private bank, is tilting towards a slight overweight stance
on equities, while spreading exposure, holding gold and taking
other measures to protect against a possible return of
volatility.
The firm has cut its tactical US equity exposure. On fixed income
overall, it has cut exposure, it said in its monthly update on
positioning. It has gone overweight on gold, from a previous
neutral position, it has cut US dollar and pound sterling
exposure, and taken a more positive stance on broad emerging
market foreign currencies.
Within the equity bucket, the bank is overweight of world
“minimum volatility” stocks, US equal-weighted equities, Europe
excluding UK stocks, and Japan. It is neutral on UK stocks and
Pacific ex-Japan equities. In fixed income, the firm is negative
US investment trade debt, and neutral global high yield and
emerging market debt, and overweight European investment grade
debt.
The main thrust of Brown Shipley’s investment message is that it
is increasing diversification – “it is more important than ever
now,” Daniele Antonucci, chief investment officer, Quintet
Private Bank, parent of Brown Shipley, told journalists at a
briefing in London yesterday.
Since markets recovered following the slide in early April,
uncertainties remain about what the Donald Trump administration
will do about tariffs, and possibly, the taxation of US
Treasuries-related income (known as Section 899).
The outlook for US and European economic growth points to
convergence in 2026 and beyond, Boryana Perfanova, client
investment specialist, told the same briefing. “We are moving to
an environment where we are more likely to get moderate growth
and slowing inflation.”
The firm said there’s a case for holding emerging markets because
they tend to perform more strongly when the dollar weakens, as
this reduces domestic inflation pressures in these markets.
Emerging market equity valuations are also relatively attractive,
it said.
Another way to diversify, the firm explained, is looking for
broad and intersecting investment themes, such as cybersecurity,
technology and AI, defence, healthcare, infrastructure, clean
energy, and the aspiration economy (luxury, etc).
Weightings
As Brown Shipley has cut holdings of some US stocks, such as
those with high exposure to large cap, big techs, it has moved
towards equal-weighted US equities instead. (This also highlights
how wealth managers are trying to avoid concentration risk issues
that can build in capital-weighted market indices.)
The firm has cut its US dollar exposure; rising US Treasury
yields, amidst concerns about expanding US public debt, have
raised questions about US bonds and the safe haven status of the
greenback.
Antonucci turned to the topic of Japan.
“One of our most significant recent moves has been increasing
exposure to Japanese equities, which offer attractive valuations
and strong diversification potential,” he said. The bank argues
that after years of deflation, inflation is finally returning –
to a degree – in Japan. This prompts the Bank of Japan to stand
apart as the only major central bank that is raising interest
rates.