Evelyn Partners has added three new funds to its active managed portfolio service (MPS).
As part of a rebalance of its portfolios, the investment platform has brought in GQG US Equity, INPP and Federated Hermes Asia Pacific ex-Japan.
James Burns, lead manager of the active MPS, described GQG US Equity as a large cap, high conviction strategy with a benchmark agnostic approach and a strong long term track record. It was added to all but the lowest risk model.
INPP is a listed infrastructure investment trust which, due to the movements in bond markets, has seen its discount to net asset value widen significantly in recent months, Burns noted. “The dividend yield on offer looks compelling and it was added to the two lowest risk models,” he added.
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Burns said Federated Hermes Asia Pacific ex-Japan was brought into the highest risk model to replace two incumbents in which conviction had waned. The pair of exited funds were Asia Dragon Trust – which could soon be merged with the Abrdn New Dawn trust – and Fidelity Emerging Markets.
In broader terms, the rebalance raised the overall allocation to fixed income across the service at the expense of equities, due to the rising yields on offer.
Within fixed income the team added to existing positions including Vanguard US Government Bond Index, Artemis Corporate Bond, Sequoia Economic Infrastructure Income and M&G Emerging Markets Bond.
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Burns commented: “This rebalance saw us increase our allocation to fixed income as the yields available on both government and corporate bonds continue to look attractive. Most significantly, the exposure to US government bonds hedged back to sterling was generally increased across the range as we believe that the US is close to a peak in its interest rate cycle.
“We would expect these bonds to provide good risk-off protection for the portfolios should the macro-economic picture deteriorate.
“The reduction in equities does not reflect a particularly negative outlook, rather an acknowledgement that there is more uncertainty for risk assets and that it was prudent to trim our long-held overweight position,” he continued. “Changes were varied across the range with the only consistent theme being a reduction in the UK exposure.”
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