Goldman Sachs Adjusts Long Duration Basket Amid Rising Interest Rates
Goldman Sachs has rebalanced its Long Duration Basket due to rising interest rates affecting growth stocks, especially those with cash flows concentrated in the future. The bank's equity strategist David Kostin noted that equities struggle to absorb sharp changes in interest rates.
The iShares Russell 1000 ETF (IWB) tracks the basket and has seen rebalancing due to these market conditions. According to Goldman Sachs, some stocks have been removed from the basket, while others have been added or increased in weightage. SiTime and NIQ are among the top-rated stocks in the Quant ratings of the Long Duration Basket.
The rebalancing is a response to changing market dynamics, where growth stocks with distant cash flows are under pressure due to rising interest rates. This has led Goldman Sachs to re-evaluate its portfolio composition and adjust the basket accordingly.