Analysts at Goldman Sachs said in a note that they are shifting to Overweight commodities on a three-month and 12-month time horizon to diversify overheating and geopolitical risk. They are also shifting to Overweight cash on a three-month horizon to reduce portfolio risk.

The investment bank notes that the macro backdrop has turned "less friendly" since March due to higher inflation and upward pressure on rates. Still, their baseline remains friendly for the rest of the year.

"While our business cycle indicators still point to a late-cycle backdrop, those can last a long time, and equities can do well if there is no recession," says Goldman.

Furthermore, the investment bank believes commodity performance should be further supported by a late-cycle backdrop with moderate to low inventories, deficits and backwardation.

"We also recommend selected option overlays to reduce risk, including selling rates to buy equity vol, longer-dated collars and Dollar upside," they added.

On cash, analysts at Goldman Sachs said they continue to like the Dollar as a portfolio overlay to reduce US rate shock risk.

Goldman said: "While cash looks more attractive from both a return and risk perspective against a 'higher for longer' rates backdrop, with our macro baseline of continued inflation normalisation we would aim to be fully invested on 12m horizon."