Arbuthnot Latham is broadening portfolio exposure as market gains become more concentrated in a small group of AI-linked companies.
The firm still sees artificial intelligence as an important long-term theme, but it is reducing reliance on the companies that have benefited most from the investment cycle so far. The aim is to keep exposure to structural growth while lowering concentration risk.
In emerging markets, Arbuthnot Latham reduced an overweight position after gains became increasingly dependent on a narrow group of semiconductor and technology companies. The firm continues to see support from a weaker US dollar and ongoing AI-related investment, but it has taken some capital out of the area and moved it into world equities excluding the US, industrials and materials.
That shift gives the portfolio exposure to a wider set of earnings drivers. Industrial and materials companies can benefit from spending on infrastructure, manufacturing, energy and physical assets, reducing dependence on technology-led market leadership.
Arbuthnot Latham also changed its US equity exposure. It reduced a holding in an investment manager with a large allocation to AI-related stocks and moved the proceeds into an equal-weighted S&P 500 strategy.
The change reduces the influence of the largest US technology companies and spreads exposure more evenly across the market. It also positions the portfolio for a possible broadening in earnings growth beyond the biggest technology names.
Geopolitical risk also affected positioning. Rising tension between the US and Iran increased the risk of disruption to energy markets and global supply chains. Arbuthnot Latham responded by adding energy exposure. The position provides some protection if disruption in the Middle East pushes oil prices higher.
The firm also adjusted part of its hedge fund allocation, moving capital into a strategy with historically low correlation to equities. This is intended to improve diversification and reduce the portfolio’s dependence on stock market direction.
Arbuthnot Banking Group PLC (LON:ARBB), operating as Arbuthnot Latham, offers private and commercial banking products and services in the United Kingdom. Established in 1833, Arbuthnot Banking is headquartered in London, United Kingdom.
