On August 2nd, 2016 we increased our allocation to global equities, global real estate*, and commodities and decreased our allocation to global fixed income due to a decline in our measure of Financial Turbulence.  We remain overweight fixed income relative to our benchmarks.

Market volatility increased following Britain’s decision to leave the European Union but markets have stabilized in recent weeks. Our measure of Risk Concentration, however, remains elevated indicating that global markets remain vulnerable to negative shocks.

Valuations for U.S. Equities and U.S. REITs are high relative to foreign markets. We are overweight non-U.S. assets within our equity and real estate allocations. Despite our overweight to global fixed income, we maintain an overall lower duration in our portfolios relative to our benchmarks.

There remains a great deal of uncertainty in global markets including: consequences of Britain’s decision to leave the European Union, a close and contentious presidential election in the U.S., and continued concerns surrounding fiscal stimulus from central banks around the globe. As a result of these uncertainties, we will remain defensively positioned until we detect that the markets will be able to absorb a significant shock.

*Global real estate includes U.S. real estate, foreign real estate, and infrastructure.

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