The BOKF Asset Allocation Committee recently made a few changes to the tactical asset allocation guidance used to manage client portfolios. The Committee believes economic risks continue to skew to the downside and the probability of a recession has increased. The Federal Reserve is faced with the difficult choice of continuing to raise interest rates to fight inflation or pausing in the near future amidst instability in the banking system. Banks play a vital role in the health of the overall economy and pressures in the banking system may lead to tighter lending standards and less credit access to consumers and business, resulting in slower economic growth. Based on this outlook, the decision was made to reduce mid cap equities in favor of fixed income. The Committee will continue to monitor the situation closely and take actions as needed.
Tactical Allocation Changes
UPAL Balanced Model
The allocation to the UPAL Mid Cap Fund is being reduced by 2% while the UPAL Core Bond Fund will be increased by 2%.
UPAL Conservative Model
The allocation to the Mid Cap Fund is being reduced by 1% and the Alternative Investment Fund is being reduced by 5%. The UPAL Core Bond Fund will be increased by 5% and the UPAL S&P 500 Index Fund will be increased by 1%.
UPAL Aggressive Model
The allocation to the UPAL Mid Cap Fund is being reduced by 4% while the UPAL Core Bond Fund is being increased by 4%.
