In March we have decided to perform further risk management and we therefore decrease our allocation to equities. We move to neutral, having been overweight for the best part of the last 4 years.
The situation in global money and credit markets are now so severe that risks of a very negative outcome along the lines of the Fed's "negative feedback loop", are significant.
It is not our main expectation, but in the short term things could get really ugly before they get better. As such, having been overweight for the past 6 months we cannot sustain a further drop of 5 to 10 percent, which is why we perform this act of risk management. Within global equities, we re-establish our regional overweight in EM.
Read more in our monthly TAA publication (March 2008) (PDF: 360kb. 4 pages)