Trim Capital’s asset allocation playbook

Shane Lee, Senior Analyst at Trim Capital, outlines the firm’s macro view following their May strategy paper, which warned of three major pressures on the US consumer: direct tariff costs, uncertainty suppressing spending and tighter financial conditions. 

Shane notes that while the direct impact of tariffs may be modest, the indirect effects, particularly from prolonged uncertainty, could tip the economy into recession.

Shane currently recommends a modest underweight in US and Australian equities, favouring Japan and Europe on valuation grounds. Despite risks in export-heavy markets, Shane argues they are better positioned defensively. Meanwhile, the US remains vulnerable despite its AI-driven structural tailwinds.

Shane emphasises the role of time — not just as a passive factor, but a critical variable. The longer uncertainty persists, the more consumer and business confidence erodes.

Defensively, Trim favours Australian sovereign bonds over US Treasuries, citing more room for RBA policy easing and Australia’s relative insulation from global trade tensions. Infrastructure and property also feature in their positioning, with Shane noting that these typically perform well during equity downturns, barring any sustained upward pressure on long yields.