Global small caps remain attractively valued versus large caps, with supportive earnings trends; however, as the likelihood of multiple US rate cuts has faded, we trimmed exposure moderately to reduce sensitivity to a higher inflation and higher-for-longer rates environment while retaining a constructive allocation.

‍

Artisan Global Discovery and Arrowstreet Global Small Companies were trimmed, with Vinva Global Alpha Extension increased to provide broader global equity exposure and reduce the portfolio’s sensitivity to global small caps. While small companies continue to offer attractive long-term value, the outlook has become more balanced as expectations for multiple US rate cuts have faded and inflation and interest rate risks remain elevated. The change retains exposure to growth opportunities while improving diversification and moderating the portfolio’s reliance on a small-cap recovery.