Sentinel Trust warns of circular financing risks in AI investments
SPY•Sentinel Trust warned that circular financing raises risks across AI investments and broader markets, while favoring diversified portfolios with added cash. The firm remains overweight cash and underweight bonds, and said listed real estate fell 6% in the third quarter.
1. Portfolio positioning
Sentinel Trust favors diversified portfolios with added cash and remains overweight cash and underweight bonds, citing persistent inflation and rising interest rates. Despite caution about global equities, the firm said investors should remain nearly fully invested, with smaller US companies and international markets offering diversification.
2. Real estate and hedge funds
The firm remains underweight real estate, citing rising rates and complex financing risks for data center developers; listed real estate fell 6% in the third quarter. Within hedge funds, it favors uncorrelated strategies over directional exposure amid concerns about crowded AI positions.
