We continue to position portfolios according to our belief that equities will outpace bonds. Equities likely can withstand an uptick of inflation, buttressed by earnings. Bonds look more attractive in the short term, but we are concerned about expected 3Q18 U.S. Treasury issuance.
We think policy will drive markets going forward, and focus on assets that are geared to growth. Global equities look most attractive under current conditions. We maintain our emerging market and U.S. small-cap positions, and continue to rotate our equity position toward Japan.