The portfolios have benefited from their positions in growth stocks and in small-caps. Emerging markets and European holdings have been drags on performance. We maintain our current equity allocations, with an overweight to U.S. stocks and an emphasis on growth over value. Small-caps are at a benchmark weight.

Bonds were flat generally, with some weakness in the credit markets as stocks became more volatile. We have been overweight to corporate debt, but spreads have started to creep up over the last several weeks, a development that we are monitoring.

PROTECT: Risk Assist

It was another largely sideways week for global equities as markets lacked any strong trend in either direction. As we head into summer, volatility expectations for stocks remain generally low—the VIX closed the week below 14, which is lower than its long-term historical average.

SPEND: Real Spend

Global equities ended the week down. Bonds, while flat for the week, outperformed stocks—with the yield on the 10-year U.S. Treasury note inching down to 2.90%.

Year-to-date, global stocks continue to outperform—up 1.0%, with U.S. stocks up 4.0%. In contrast, bonds are down more than 2.0%. Additionally, the return spread between global equities and bonds over the past 12 months is 13.7%.

REITs were the best performers for the week, up 1.8%, followed by investment grade bonds (up 0.1%). In contrast, high-yield bonds were down 0.2% and preferred stocks were flat.

During the coming week, we will be paying close attention to inflationary data that will be released, such as PCE and personal income and spending.

This article was contributed by Horizon Investments, a participant in the ETF Strategist Channel.