Last time we checked in with the team at Forvis Mazars, they were refraining from joining an ‘increasingly fragile’ equity rally.

This time around, chief investment officer Ben Seager-Scott has gone one further by cutting US exposure, in order to fund pursuits elsewhere. 

He said: “We have seen the US market stall outside of mega-cap technology, and the US as a whole appears unjustifiably expensive.”

“We specifically retain our exposure to the US growth style, as we recognise the powerful market forces driving the top end of the market, and we don’t see the value in anyone trying to second-guess this trade.

"As a result, we remain neutral in US large-cap growth, but we move further underweight to the US as a whole, particularly in value and small caps.”

Therefore, Seager-Scott cut the funds' position in Dodge and Cox US Stock and used the proceeds to make further forays into Japan, a country which he said he thought was looking more appealing. 

Doubling down on Japan is an interesting call, given that earlier in July, AA reported on a slight hesitancy among allocators to the country, as we go into the second half of 2024. 

But Mazars sees the Japanese economy as finally improving after a decades-long malaise, rising wages and normalised monetary policy.

Seager-Scott told Asset Allocator that Japan could benefit from the reignition of a US-China trade war, which made it a compelling tactical play for him.

Elsewhere, the team sold out of the Baillie Gifford High Yield Bond fund and replaced it with a passive tracker, as "performance has not been spectacular", Seager-Scott added.

You can refresh your memory with our recent analysis of outperforming Japanese funds here.