The team behind Charles Stanley’s managed portfolio service (MPS), now part of Raymond James, has rebalanced portfolios after a recent strength in equity markets have led to risk assets drifting above target levels.
At the same time as reinstating a modest underweight to risk assets, MPS managers Abbas Owainati, Peter Brookes and Benedict Tottman have added commodities exposure to selected solutions, most notably the largest proposition, Dynamic Passive.
Abbas Owainati, Head of Portfolio Management and Asset Allocation at Raymond James, comments: “Equities remain a key risk driver; however, market returns have become increasingly concentrated amongst a relatively small number of companies and sectors, particularly those linked to semiconductors and the AI theme. Whilst this has supported portfolio performance, it has also reinforced the importance of maintaining a balanced and diversified portfolio.”
“The recent news surrounding an agreement between the US and Iran has helped to buoy sentiment, as we have seen oil prices retrace to below $80. We felt this provided us with an attractive opportunity to introduce a dedicated commodity exposure for solutions not already holding a position. For unit trust orientated solutions like our Dynamic Passive range, this has also been supported by the availability of a suitable index solution, which is now available on many platforms.
“Strategically, our conviction in commodities is not only driven by the energy markets, which makes up around one third of the commodities index. We believe there are several structural tailwinds that render it an important position for our clients’ portfolios. These include geopolitical risks, climate change and pressures on the food supply chain.”
