Forvis Mazars reduces exposure to UK in rebalance to its Model Portfolios

Ben Seager-Scott, Chief Investment Officer at Forvis Mazars, explains the firm’s latest quarterly portfolio rebalance, which increases exposure to US and emerging market equities while trimming positions in mega-cap US technology, the UK and Japan.

Ben Seager-Scott, Chief Investment Officer at Forvis Mazars said:

“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. 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.“

Market backdrop

Markets ended last year on a strong footing, and that positive momentum has continued into the early weeks of 2026 – though not without the occasional stumble as geopolitical tensions resurface. Overall, most major asset classes delivered solid returns in 2025. Government bonds were relatively stable and, supported by their interest payments, broadly kept pace with inflation. Riskier fixed-income assets, such as corporate credit, also performed well. Equities had an especially robust year. Developed Market shares rose +13% overall, led by standout gains of +29% in the UK and +28% for Continental Europe. The US lagged somewhat at +12%, having been hit harder during the tariff-related market sell-off. As we consider the investment outlook from here, shifting dynamics have prompted us to make several adjustments to our asset allocation which we talk about in this note.

In recent weeks we have seen a flare-up in the US administration’s foreign policy activity. Venezuela, Iran and Greenland have already featured prominently in the headlines, and we expect this whack-a-mole geopolitical dynamic to continue throughout the year. While these developments carry important societal consequences, our focus as your investment managers is on their market impact – so far, markets have largely taken these events in their stride. A topic to explore further in a future update.

Last year’s strong equity performance has pushed valuations in certain areas to stretched levels – most notably among the largest US technology companies, often referred to as the ‘Magnificent Seven’. We believe these names now look especially richly priced, with significant future growth already assumed, whereas other parts of the market appear more attractively valued with greater potential for upside.

The upcoming US mid-term elections could play an important role in shaping market sentiment. With the Republican Party at risk of losing control of Congress, we expect the administration to pursue policies aimed at creating a short-term boost to the economy and markets. This is likely to begin with tax rebates stemming from last year’s ‘One Big Beautiful Bill’ legislation, alongside potential tariff relaxations and other supportive measures. At the same time, central banks have signalled that – while inflation remains broadly contained – they stand ready to step in to support markets should meaningful weakness emerge.

Taken together, we believe these forces are likely to be supportive for equities over a tactical time horizon (approximately six months to two years), even if they risk creating longer-term challenges. We are positioning our portfolios accordingly.

The following pages set out the specific changes we are making within our model portfolios. The note is a little longer than usual to give us enough space to explain the changes and some of the rationales. If you have any questions or comments, please do let your usual Forvis Mazars contact know, and we would be happy to explain in more detail.

We will continue to update you as these themes evolve in the months and quarters ahead.