The Switzerland-based external asset manager gives an update on how it is setting up its portfolios and asset allocations in the wake of the US elections.

Recent portfolios gains and some uncertainties have encouraged Geneva-based Apricus Finance, an external asset manager, to shift some of its overweight stance in the eurozone equity market to the US.

The firm (see here for a previous commentary) said previously that its overweight positions are also coupled with large underweights in the luxury and car sector.

“Another reason to cut active risk in our portfolio is the likely inter-market and intra-indices volatility that we might see over the next few weeks, ahead of year end: on one side many portfolio managers are likely to reposition themselves in view of the uncertainties from early 2025,” the fiim said.

In asset allocation terms, the firm said it is keeping to an overweight eurozone equities position versus the US broader market, while being neutral in the technology sector. It also owns a reduced, partial put option on US equities, suggesting that it is continuing to eye downside risk protection. 

Turning to fixed income, Apricus said it has exposure to investment-grade credit, European high yield, hybrids, financials’ subordinated debt, US municipal infrastructure and Asian hard currency debt.

As for currencies, the firm said its exposure to the Japanese yen is mostly hedged; it is keeping a 5 per cent exposure to the dollar. The firm has a 5 per cent allocation to gold to diversify its assets.

Explaining some of the background, Apricus noted that investors had positioned for Donald Trump's victory in the November elections, taking the view, for example, that the 2017 tax cuts of the first Trump administration would be continued; that potential tariffs would not have adverse outcomes, and that there would be less regulation on financial services. 

“Exposure thus started to increase to large banks, oil services, health services, small caps, Tesla, cryptocurrencies and crypto-related stocks, and obviously Trump’s Media and Technology Group, (TMTG),” Apricus said.