In its latest re-balance of portfolios, the Evelyn Partners Core Managed Portfolio Service (MPS) team has significantly increased exposure to fixed income assets, both corporate and government bonds, as the yields available continue to look attractive.
The team predominantly added to a mixture of shorter-dated UK corporate bonds and longer dated US government bonds, although exposure to US Treasury Inflation-Protected Securities has also been increased, but to a lesser degree. Currency exposure on US fixed income has been hedged back to sterling. No new individual fund names were introduced to the range in the latest rebalance.
These moves were funded by a small decrease in the equity weightings combined with a slightly larger reduction in alternative assets, most notably absolute return funds and cash.
James Burns, lead manager of the Evelyn Partners Core MPS commented: “This rebalance saw us make some notable changes to the overall asset allocations of the portfolios designed to improve the overall risk/return profile of each one. The resultant mix in the portfolios enables us to take advantage of inflation continuing to fall in the short term whilst also providing protection should longer term inflation prove to be more persistent.
“We still believe that equities have further to run this year but felt it was sensible to take some money off the table following the strong recovery that almost all markets have enjoyed over the past couple of months. Absolute return funds still have a significant role to play in diversified portfolios, but in the current environment they may struggle to repeat their performance of the past couple of years.”
