Fifth Third Wealth Advisors CIO overweights real assets as growth and inflation rise

Fifth Third Wealth Advisors is overweight real assets because CIO Chris Osmond places the economy in a regime of rising growth and rising inflation. In an Oct. 16 WealthManagement.com Q&A, he says the firm also holds a bullish view on infrastructure, because real assets tend to perform well in inflationary environments and amid rising growth. He describes the setup as "very similar to where we are today."

The firm launched in 2022 as a wholly owned subsidiary of Fifth Third Bank and has $7.8 billion in assets under management. Average household assets are about $9 million, Osmond said, and the client base is heavy with qualified purchasers—from mid-40s to baby boomers who are pre-retired or already retired. WAD records show 2,121 accounts and 83 employees as of Oct. 10.

WealthManagement.com frames the $9 million average as giving advisors more room for higher-yielding, riskier private-market investments, provided clients have the appetite for them. Osmond's description makes qualified-purchaser status and client tolerance the conditions that separate an allocation the firm can make from one it can pitch.

Osmond's four-quadrant framework starts with strategic asset allocation over a three- to five-year horizon, then adds a six- to 12-month tactical overlay. Rising growth with falling inflation calls for risk-on; rising growth with rising inflation, his current read, calls for real assets; falling growth with rising inflation calls for avoiding long duration and adding market hedges; falling growth with falling inflation calls for extending duration while staying defensive. Geopolitics and the rising cost of capital are among the factors that shift allocations within a regime, Osmond said.

Rising yields are the biggest risk to the portfolio, Osmond said. That concern sits alongside positioning this publication reported on Oct. 2 when Open Arc has trimmed spread exposure and kept dry powder while Amplius moves gradually from underweight duration toward a neutral stance as Treasury yields reach two-decade highs. In Osmond's own matrix, duration is the lever reserved for falling-growth, falling-inflation, while falling growth with high inflation leads to market hedges rather than long bonds.