Kate Moore 3.5 15 ideas

Moore stated she would buy gold today if an investor didn't have exposure, holding it as an important "ballast" in a multi-asset portfolio. She added it was originally included due to a preference for it over long-duration bonds as a hedge. In an environment of geopolitical uncertainty and potential stagflationary shocks, gold serves as a non-correlated store of value. Its recent underperformance during the conflict was attributed to poor positioning, not a failure of the thesis. It is a recommended hedge and portfolio diversifier, especially given still-subdued positioning among retail investors. A rapid de-escalation of the Iran conflict and a swift return of real interest rates to sharply positive territory.

Kate Moore trimmed emerging market debt from the portfolio in response to the lack of price action or yield move during the crisis. The muted response indicates that EMD may not provide the desired resilience or yield advantage in the current risk environment. Therefore, she is avoiding emerging market debt (AVOID) due to poor risk-reward and insufficient hedging benefits. If global growth accelerates or yields decline, EMD could become attractive again.

Kate Moore added short-duration bonds to the portfolio last week. She believes yields, especially on the two-year, had moved too far towards expectations of a rate hike, making short-duration attractive. Therefore, she is bullish on short-duration bonds (LONG) as a resilient position amid uncertain inflation and Fed policy. If inflation proves more persistent than expected, yields could rise further, negatively impacting short-duration bonds.

Kate Moore added gold to the portfolio as ballast but notes that positioning has become very stretched. Stretched positioning reduces gold's effectiveness as a hedge in risk-off moments, as seen in recent underperformance. Therefore, gold requires caution and monitoring (WATCH) due to potential lack of hedging efficacy. If geopolitical tensions escalate or positioning unwinds sharply, gold could see volatile price movements.

States European equities have seen roughly twice the drawdown of U.S. large caps since the start of the year and are more sensitive to higher oil prices and a challenging inflation environment. The growth outlook for Europe may need to be downgraded. Even before the Iran crisis, fundamentals were unlikely to catch up with 2025's market performance, making significant multiple expansion necessary for outperformance, which is unlikely. Prefers U.S. large caps. Views European equities as a vulnerable area to avoid given the current macro and geopolitical backdrop. A rapid de-escalation in Iran coupled with a more resilient than expected European economy.

The U.S. large cap space, the S&P 500, which has been treading water for six months, is holding up relatively well because people had already taken down a little bit of their exposure there. And it's frankly, a higher quality part of the market. When geopolitical or economic shocks occur, capital flees speculative assets and seeks safety in liquid, high-quality balance sheets. Because investors had already reduced their S&P 500 exposure prior to the shock, the market is structurally insulated from panic selling. Go long U.S. large caps as they serve as the safest vehicle within risk assets during periods of macro uncertainty. A severe, prolonged recession could eventually drag down large cap earnings, overriding the current positioning advantage.

You saw the biggest move so far in the small cap space, in non-U.S. equities, places where there was a significant move over the course of 2025. Much of it driven by multiple expansion and not earnings. Assets that appreciate purely because investors are willing to pay higher valuation multiples (rather than because the companies are making more money) are the first to collapse during a risk-off event. Without an earnings floor, small caps and international stocks will face severe multiple compression. Avoid small capitalization and international equities until valuations reset to match their actual earnings power. Central banks could inject massive liquidity, which typically disproportionately benefits lower-quality, high-beta assets like small caps.

People were taking down some of the risk in some of the secular growers. I think those still offer better quality and frankly, better likelihood of being able to sustain their earnings momentum even in more kind of a geopolitical and economic shock environment. The market previously sold off Tech and Communication Services due to fears over AI CapEx sustainability and high concentration. This de-risking created an attractive entry point for companies that have monopolistic moats and the ability to generate cash flow regardless of the broader economic cycle. Long the Tech and Comm Services sectors as defensive growth plays with washed-out positioning. Regulatory crackdowns or a sudden halt in enterprise AI spending could directly impact the earnings momentum of these mega-caps.

There is consistent demand for industrial metals. We've talked, of course, about copper and other things going into the AI build out and CapEx story. The physical build-out of data centers and power grids required for artificial intelligence creates a structural, price-inelastic demand for copper. This secular tailwind will overpower short-term cyclical price volatility in the commodities market, benefiting both the physical metal and the miners who extract it. Long copper and major copper producers to capture the physical layer of the AI infrastructure boom. A severe global manufacturing recession could temporarily crush industrial metal prices before the long-term AI demand fully materializes.

The firm remains cautious on taking risk in duration (long-term bonds). Despite the "sedate" yield environment, structural headwinds (deficits, inflation stickiness) make long-duration bonds unattractive compared to equities or gold. AVOID US TREASURIES (Long Duration). A sharp recession forces the Fed to cut rates aggressively.

BlackRock has been adding gold to portfolios, and it has been a top contributor. Gold is no longer just a hedge/ballast; it is a structural investment driven by central bank diversification and geopolitical/inflation fears. LONG GOLD. Real interest rates spike significantly.