Evelyn Partners’ Active Managed Portfolio Service (MPS) team has sold out of JP Morgan US Equity Income and reduced its exposure to Federated Hermes Global Emerging Markets in its latest rebalance.
Proceeds from selling the £3.5bn JP Morgan US Equity Income fund – which is managed by Clare Hart, Andrew Brandon and David Silberman – have been reinvested into BNY Mellon US Equity Income. The team said this was chosen “primarily based on a preference for the process of the team”, although it added it was “also able to benefit from access to an attractively priced share class that led to an overall OCF saving”.
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James Burns (pictured), lead manager of the Evelyn Partners Active MPS, said: “In the US equities space, supported by a relatively stable macro-economic outlook and a resilient earnings story, we see scope for the rally in US equities to broaden out from the ‘Magnificent Seven’ mega-cap stocks and that sectors such as financials and healthcare should benefit.
“The BNY Mellon US Equity Income fund, managed by John Bailer, should benefit from this trend as it currently has financials and healthcare as its top two sector weightings.”
Elsewhere, Kunjal Gala’s £2.7bn Federated Hermes Global Emerging Markets fund was removed from all of Evelyn Partners’ Active MPS portfolios apart from Dynamic Growth, where its weighting was “reduced significantly”, according to the team.
Instead, the capital was reinvested into Baillie Gifford’s Emerging Markets Leading Companies fund, which is co-managed by Will Sutcliffe, Roderick Snell and Sophie Earnshaw. Burns said the fund, which is “unashamedly growth-focused”, will “benefit significantly from any improved outlook and sentiment towards” emerging markets.
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Across Evelyn Partners’ three lower-risk portfolios, the team has added to its positions in three investment trusts: BH Macro, Empiric Student Property and International Public Partnerships (‘INPP’). This, Burns said, was to “take advantage” of “persistently wide discounts” across the investment companies’ respective sectors.
“We believe the discounts that have persisted in our property, infrastructure and hedge fund investment company for the past year and a half are unsustainable,” he explained.
“Any change in sentiment, either because of the outlook for interest rates or because of a change to the penal cost disclosure regime that these companies are currently subject to, could see a significant narrowing of discounts and the possibility of very attractive returns.”
