Risk-On Returns, But Cracks Still Show Beneath The Surface
James Picerno·2026-05-07·via All Articles on Seeking Alpha
Summary
A big‑picture measure of the trend in global asset allocation has rebounded to a positive bias, based on the ratio of two global asset allocation ETFs.
Another area not participating in the risk‑on revival, at least in relative terms, is small‑cap stocks. The ratio of small caps (IJR) to large caps (SPY) is near its lowest level of the year following the runup late last year.
From a top‑down perspective, the case for risk‑on once again looks solid. Beneath the surface, however, the outlook is mixed.
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A few days before the war with Iran began on Feb. 28, The Capital Spectatorreported that “Bullish Momentum Holds Firm in Global Asset Allocation,” based on a set of ETFs targeting multi-asset strategies. The risk‑on profile quickly
