Forvis Mazars has announced a reduced exposure to the UK in the latest quarterly rebalance to its model portfolios.

In its rebalance, the firm increased its equity exposure by boosting allocations to US and emerging market equities.

Meanwhile, it reduced its exposure to US mega-cap tech, and allocations to the UK and Japan.

Forvis Mazars noted that markets ended 2025 on a strong footing, and that positive momentum had continued in the early weeks of 2026, but not without the “occasional stumble” amid continued geopolitical tensions.

Most major asset classes had delivered strong returns last year, with government bonds relatively stable and keeping pace with inflation.

Riskier fixed-income assets, such as corporate credit, also performed well, while equities had a particularly robust year.

Developed market shares rose by 13 per cent overall, led by gains in the UK (29 per cent) and Continental Europe (28 per cent), while the US lagged relatively at 12 per cent.

“As we consider the investment outlook from here, shifting dynamics have prompted us to make several adjustments to our asset allocation,” Forvis Mazars stated.

While the US’s foreign policy activity has flared up in recent weeks, markets had largely taken these events in their stride, the firm noted.

It believed that the largest US tech companies now looked especially richly priced, while other areas of the market appeared more attractively valued with greater potential for upside.

With the US mid-term elections coming up, Forvis Mazars expected the administration to pursue policies aimed at creating a short-term boost to the economy and markets.

At the same time, central banks had signalled they were ready to step in to support markets if meaningful weaknesses emerged.

Taken together, Forvis Mazars expected these forces to be supportive for equities over six months to two years, and was positioning its portfolios accordingly.

"We have rebalanced our portfolios at the start of the year, taking profit in areas that have worked well whilst also reorientating our tactical stance as we see the investment outlook shifting,” said Forvis Mazars chief investment officer, Ben Seager-Scott.

“For the period ahead, we see a focus on fundamentals being replaced by market dynamics and liquidity, particularly from stimulus measures in the US during a mid-term election year.

“We have increased overall equity exposure by increasing US and emerging market equities and also take this opportunity to tilt away from expensive mega-cap US technology names."

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