Evelyn Partners’ Active Managed Portfolio Service (MPS) team has re-balanced three of its six strategies, with fixed income dominating the new allocations.
The latest changes have impacted the defensive, defensive income, and balanced models, with the balanced growth, growth, and dynamic growth offerings unaltered.
In the defensive model, the team increased exposure to gilts, UK corporate bonds and overseas bonds hedged to sterling. This was funded by reducing cash and dollar-denominated investment grade bonds. The team also took advantage of the sell-off in credit. Bond duration remains short.
The rationale for making changes in defensive income was the same as for the defensive model, but with slightly different weights and a small net increase in allocation to hedge funds, the team said.
The decision to add exposure to Fulcrum Diversified Absolute Return in both models was for diversification purposes.
The breakdown is as follows:
| Defensive | Defensive Income | |
| Cash | (2%) | (1.25%) |
| iShares USD Corporate Bond | (1.5%) | (0.75%) |
| iShares UK Gilts 0-5 Years | 1% | 0.25% |
| Artemis Corporate Bond | 1% | 0.75% |
| Axa US Short Duration High Yield (hedged class) | 1% | 0.5% |
| Sequoia Economic Infrastructure Income | 0.5% | 0.25% |
| BH Macro | (0.5%) | (0.25%) |
| NB Uncorrelated Strategies | (1.5%) | (1%) |
| Fulcrum Diversified Absolute Return | 2% | 1.5% |
Source: Evelyn Partners
The balanced income model followed a similar theme, also dedicating more space to Artemis Corporate Bond and Axa US Short Duration High Yield. Equity considerations weigh more heavily in this model, and the team sought to bring the UK allocation closer to equal weight, aiming to reflect the current positive outlook for large cap UK stocks. As a result, the portfolio’s exposure to Vanguard US Equity Index was reduced, while exposure to the L&G UK 100 Index Trust went up.
| Balanced Income | |
| Cash | (1%) |
| M&G Emerging Markets Bond | (0.5%) |
| Artemis Corporate Bond | 1% |
| Axa US Short Duration High Yield (hedged class) | 0.5% |
| Vanguard US Equity Index | (0.5%) |
| L&G UK 100 Index Trust | 0.5% |
Source: Evelyn Partners
James Burns (pictured), lead manager of the Evelyn Partners Active MPS, extolled the flexibility that the investment approach provides. In its 10th anniversary year, he added that all six models gave outperformed their respective benchmarks over the last decade.
He added: “The changes announced in the latest re-balance, although not huge in quantum, convey a strong message that some dry powder is being deployed into areas of the fixed income market that are, for the first time in years, and following a pretty savage sell-off, looking pretty attractive.”
Evelyn Partners’ six risk-mapped Active MPS portfolios are actively managed and built using a range of investment tools including open-ended funds, investment companies and passives. The portfolios are available through investment platforms such as abrdn (Wrap), Aviva, M&G Wealth Platform (Ascentric), Novia, Quilter, Transact and 7IM.
