Inside Raymond James & Associates’s 2024-Q3 Playbook: From Low-Vol to Broad Beta

The standout statement this quarter is the decision to radically scale Broadcom. AVGO jumped to 1.33% of the book with shares up +855.4% and an estimated dollar add of $1.96B, turning what had been a respectable position into a core AI infrastructure bet alongside existing stakes in Nvidia and Microsoft.

Around that, they fortified the book’s beta engines. VOO, AGG, SPY, IVV, IJH, and IJR all saw adds, with IJH in particular up +45.7% and about $537.7M of fresh capital. That is a deliberate vote for mid-cap U.S. cyclicals, not just the mega-cap tech complex that dominates the S&P and Nasdaq.

Healthcare got a clear upgrade as a structural growth and defensiveness sleeve. UnitedHealth shares rose +33.1% (about $343.3M more), Johnson & Johnson was lifted +9.5% (about $96.7M), and Eli Lilly gained +7.4%; Merck and AbbVie also ticked higher. Together, those moves take Health Care’s share of the book from 6.45% to 6.88%, and they are increasingly implemented via stock selection rather than just the XLV ETF.

Consumer and communications exposure skewed toward resilience and income. Amazon was increased +7.2% (about $177.5M) as a high-conviction platform winner; Walmart, Home Depot, and Procter & Gamble were nudged higher as staples‑adjacent consumer bellwethers. Verizon, up +16.9% and roughly $125.1M, shows a willingness to embrace high-yield, out‑of‑favor telco cash flows as a quasi‑bond substitute.

The most aggressive sell was not a stock but a factor wrapper: USMV. Shares were cut -36.3%, freeing an estimated $534.1M and marking a clear turn away from the low‑volatility smart‑beta trade that had buffered the portfolio in earlier, more rate‑sensitive quarters.

They applied the same logic to sector ETFs. XLV was reduced -10.8% and XLK -2.0%, even as individual healthcare and technology names were being added or held, implying they see more value in name-by-name expression of their views than in broad sector baskets.

In single stocks, the trims look like classic profit-taking and risk concentration management. Apple (-3.7%, about -$168.7M), Nvidia (-2.9%, about -$87.9M), and Alphabet’s GOOG line (-8.0%, around -$72.9M) all came down a notch, as did Eaton (-3.0%), Salesforce (-3.5%), and a modest cut to Motorola Solutions. These are not thesis reversals; they are sizing adjustments around positions that have run hard.

Funding also came out of more cyclical and financial exposures. Chubb was trimmed -12.9% (about -$113.5M) and CME -5.4%, while Marathon Petroleum was cut -9.9% and roughly -$69.0M. That fits a pattern of rotating out of rate‑ and commodity‑sensitive names and into higher‑visibility growth and broad beta.

Under the hood, sector weights barely budged at headline level, but the type of exposure within those sectors changed. Unclassified ETFs — the core index and factor products — still dominate at 46.56% (down slightly from 47.61%), yet within that bucket the mix is tilting away from defensive factor overlays toward simple cap‑weighted beta.

Technology’s share of the book rose from 26.22% to 27.29%, but this was not about piling further into the obvious AI poster children. Instead, it was about broadening the stack: a huge AVGO build, steady Microsoft, marginal trims in Apple, Nvidia, Alphabet, Salesforce, and Eaton, and a small cut in XLK. That amounts to a subtle rebalancing from pure mega‑cap momentum into the infrastructure and diversified software layer beneath.

Health Care crept up from 6.45% to 6.88% as they shifted capital from XLV into UnitedHealth, J&J, Eli Lilly, Merck, and AbbVie. Finance slipped from 4.52% to 4.19% after cuts to Chubb and CME, partly offset by a small JPMorgan add, and Energy edged down from 0.91% to 0.79% on the Marathon trim.

Elsewhere, the fund nudged up Telecommunications from 1.74% to 1.84% via the Verizon add, and kept Industrials and Basic Materials essentially flat with small moves in Union Pacific and Air Products. The narrative is consistent: lighten sector and factor wrappers, lean a bit more into idiosyncratic alpha and straightforward index beta.

Taken together, these moves say Raymond James & Associates is preparing for a world where volatility is no longer the dominant risk and where returns broaden beyond a handful of mega‑cap tech stocks. They are comfortable owning the market directly through VOO, SPY, IVV, IJH, and IJR, and comfortable owning its structural winners via targeted, higher‑conviction bets.

The AVGO ramp tells you they still believe the AI capex cycle has legs, but they want to be paid more for plumbing than for the already‑crowded front‑end GPU trade. The incremental shifts inside Health Care suggest they expect durable policy and pricing tailwinds to continue supporting managed care and big pharma, even if growth surprises moderate elsewhere.

The concurrent de‑emphasis of low‑volatility factor products, Energy, and some insurance and broker exposure hints at a view that rate risk is now manageable and that the opportunity cost of hiding in defensives is rising. Modest adds to consumer bellwethers and payment networks (Walmart, Home Depot, Procter & Gamble, Visa, Mastercard) point to a belief in resilient nominal spending, even if real growth slows.

Going forward, this playbook leans on three pillars: core index beta as the foundation, AI and digital infrastructure as the growth engine, and large‑cap healthcare plus high‑quality consumer names as the stabilizers. It is not a hero trade, but it is a deliberate step away from defensive wrappers toward taking the market — and a few secular themes — on the chin.