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Goldman flips to overweight equities and 10-year bonds
The bank raised its three-month equity allocation from neutral to overweight and upgraded its 12-month 10-year bond outlook, citing about a 1.0 percentage point rise in yields since the start of the year.
Goldman Sachs has upgraded its outlook for equities and 10-year government bonds, citing improving return prospects for sovereign debt after yields rose, according to Hedgeweek citing a Financial Times report. Goldman’s asset allocation team, led by Christian Mueller-Glissmann, increased its three-month equity allocation from neutral to overweight, reversing a position it had held over recent months. It also upgraded its 12-month outlook for 10-year government bonds from neutral to overweight, aligning its longer-term bond stance with equities. The shift follows a rise of approximately one percentage point in government bond yields since the start of the year, which Goldman said improves potential returns for investors holding sovereign debt. The bank also pointed to higher yields, improved return asymmetry, and expectations of lower inflation as factors that could support a move back toward more conventional bond allocations within diversified portfolios. Still, Goldman maintained a neutral stance on government bonds over its three-month investment horizon, citing risks from fiscal pressures, inflation uncertainty, and competition for capital tied to AI-related investment.