As macro uncertainty looms, PNC Asset Management Group chief investment officer Amanda Agati explains her investment strategy amid what she calls a "crisis of confidence" to Market Domination host Julie Hyman and BD8 Capital Partners CEO and CIO Barbara Doran.
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We've got the the backdrop, which is still a little rocky here. What are you thinking? What's your latest thinking in terms of strategy, then? Are you getting more defensive?
Oh, no, we're definitely not getting defensive. I mean, this is an environment where we think this is much more about a crisis of confidence, a sentiment hit, a growth scare, than really sort of a material impact to the underlying fundamentals. We came into this year solid from both an economic and an earnings growth backdrop. And so, you know, there's been a lot of noise, a lot of uncertainty, but we haven't done permanent damage yet. So to the extent that we can get a faster resolution or maybe some additional clarity here in short order, I think the path forward can be very positive. And so we're using this correction as an opportunity to reposition portfolios. We're leaning into quality in particular. Um, some of the MAG 7 names aren't necessarily cheap, uh, but they are certainly cheaper than they have been. And so picking up some of these really attractive long-term secular growers at these valuation levels is, I think, the right approach here. So stay invested, stay well diversified, put some of that capital that may be on the sidelines to work, use this correction as an opportunity.
Sounds good, Amanda. Because that was going to be my question. You know, it sounds like you're putting cash to work as we speak.
Yeah, I mean That's exactly right. Yes. Absolutely.
And it seems like you you two are actually somewhat in agreement on this point as well, that, um, you know, even though maybe growth, uh, forecasts are sort of ratcheting back, they are not going down. I mean, I guess to ask it another way, Amanda, has the decline that we have seen priced in an already slowing environment to the point where it's been overdone?
Well, I I don't know that I would say that it's been overdone, right? Because we still don't know where the end state for some of this policy is likely to land. But I think we certainly have captured, uh, the lion's share of it at this point. So, you know, is this effectively the bottom or not? I don't I don't think that's necessarily the case. I think there's going to be a little bit more noise. Um, but but I do think that, you know, we came into this year so strong that there is a little bit of headroom and a shock absorber from a growth perspective. What we didn't have was a shock absorber from a valuation perspective. We came in, you know, with a market that's priced near perfection. The backdrop clearly has not been that. And so that's why I think this correction has been maybe swifter and a bit more painful than what investors would have otherwise expected. But again, the fundamentals are still hanging in there. So we feel good about positioning in this environment.