Author: Just Summit Editorial Team
Source: Federated Hermes
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In the third quarter of 2025, financial advisors have shown a cautious yet strategic approach to portfolio management amid persistent global uncertainties. Cross-asset correlations continued to decline, reflecting a divergence in international equities and fixed income from broader US market trends.
Despite strong global equity performances, allocations remained predominantly US-focused with minimal shifts toward non-US assets, hinting at advisors' cautious stance. A significant reallocation occurred as large-cap equities saw reduced allocations in favor of mid-cap stocks, possibly anticipating Federal Reserve interest rate cuts.
In fixed income portfolios, durations shortened significantly as advisors sought attractive opportunities on the shorter end of the yield curve amidst an environment that favors caution over aggressive risk-taking.
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