Breadth and Balance

by Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class, Multi Asset Strategies – EMEA, Neuberger Berman

The economic outlook may have improved, but large parts of the credit and equity markets are fully valued.

The Asset Allocation Committee (“the AAC”) is positive on the economic outlook given resilient economic growth and the likely trend lower in inflation and interest rates. Nonetheless, our asset-class views remain largely neutral—which implies broad stock and bond market exposure—as many assets are fully priced and we anticipate a shift away from the recent narrow leadership. Our only two underweight views, on cash and hedged strategies, emphasize this theme of maintaining equity and fixed income positions to benefit from the current environment. Our overweight views on commodities and private markets reflect ongoing inflation and geopolitical risks and rich opportunities in illiquid assets, respectively.

Potential for Further Broadening of Equity-market Performance: Style, Size, Region

Breadth and Balance
Source: MSCI. Indices used: MSCI World Growth Index, MSCI World Value Index, MSCI World Growth Index, MSCI USA Large Cap Index, MSCI USA Small Cap Index, MSCI USA Index, MSCI Europe Index, MSCI Emerging Markets Index. Data as of February 29, 2024.


  • The AAC has retained its neutral overall view on equities, and its overweight view on U.S. small and medium-sized companies.
  • We anticipate further broadening of equity-market performance, which leads us to continue to favor small and medium-sized companies, and a balance between styles and regions.
  • We believe momentum in Japanese equities can continue, and that an incipient rebound in manufacturing and other cyclical parts of the global economy could begin to favor European and certain emerging markets over the coming months.

Fixed Income

  • The AAC made no changes to its fixed income views.
  • We maintain an underweight view on cash, preferring to lock in yields in anticipation of a decline in cash rates.
  • Our overweight view on investment grade reflects a general bias toward quality.
  • We favor the two-to-seven-year part of the curve, and remain cautious on longer-dated bonds, given uncertainty about term premia and debt sustainability.

Real and Alternative Assets

  • The AAC continues to view commodities as a useful hedge against potential inflation and geopolitical shocks.
  • We downgraded our view on hedged strategies given its overall views on broad market exposures and fewer clear signals in the trending and macro environment.
  • We retain our neutral view on private real estate, but sees value in value add and opportunistic segments, secondaries, and in Real Estate Investment Trusts, where prices are down heavily and may already be bottoming out.
  • We maintain our longstanding view that there are outsized rewards available for liquidity provision in private markets, especially via private equity secondaries and co-investments, which could be a destination for some of the investor cash currently on the sidelines.

Market Views: Based on 12-Month Outlook for Each Asset Class

Breadth and Balance

As of 2Q 2024. Views shown reflect near-term tactical asset allocation views and are based on a hypothetical reference portfolio. Views on private market assets reflect the Asset Allocation Committee’s views on the future return potential of new cash commitments, not the future return potential of existing investments. Nothing herein constitutes a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. See disclosures at the end of this publication, which include additional information regarding the Asset Allocation Committee and the views expressed.

About the Asset Allocation Committee

Neuberger Berman’s Asset Allocation Committee meets every quarter to poll its members on their outlook for the next 12 months on each of the asset classes noted and, through debate and discussion, to refine our market outlook. The panel covers the gamut of investments and markets, bringing together diverse industry knowledge, with an average of 30 years of experience.

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