The latest rebalancing of asset allocation for the panel of 20 leading wealth management and advisory firms pointed to an increase in property, taking it up from 2% to 4%, with, perhaps unsurprisingly, Henderson, Ignis, M&G and SWIP named as the preferred funds to own in the sector.
For more aggressive investors, panellists increased their UK equity exposure by 2.76% to 34.28%, compared to the latest rebalancing six months ago. The indices are rebalanced biannually, in February and August.
Backing British
By asset class, UK equities take the largest allocation in the FE AFI Aggressive Index, with US equities following at 15.86%.
FE, the research and rating provider said in general geographical terms, for the aggressive and balanced indices, UK exposure was up by 3.87% and 3.01% respectively.
Meanwhile, the panel cut its allocation to global fixed interest almost in half, from 4.91% to 2.77%.
Good options for adventurous investors included First State Asia Pacific Leaders, Axa Framlington UK Select Opportunities, Aberdeen Emerging Markets Equity, Axa Framlington American Growth and Lindsell Train UK Equity.
For those with a balanced risk profile, the First State and Lindsell Train vehicles also appeared in this list, with others named as Standard Life Investments’ Global Absolute Return Strategies, Newton Global Higher Income and Jupiter Strategic Bond.
Time to look at real assets
Cautious investors would do well to look at Jupiter Strategic Bond, M&G Optimal Income, M&G Global Dividend, Newton Global Higher Income and JOHCM UK Equity Income.
FE head of research Rob Gleeson said: “UK equities performed strongly last year and the UK economy grew 1.9% – the fastest growing economy in Western Europe. Sentiment continues to be positive this year so we were not surprised to see advisers increasingly backing best of British.
“With interest rates expected to rise, asset allocators are seeking income-generating assets other than fixed income. Real assets such as property are an obvious choice.”
