Evelyn Partners Sustainable MPS team has switched out its holding in Impax Environmental Markets Investment Trust in favour of a smaller position its open-ended sister fund.
In the latest rebalance, lead manager Genevra Banszky von Ambroz (pictured) said the £652m Impax Environmental Markets fund offers a similar underlying exposure without the discount to NAV volatility associated with the trust vehicle.
The MPS team also used resulting balances from the Impax trade to add to its positions in the £1bn Baillie Gifford Responsible Global Equity Income and Federated Hermes Sustainable Global Equity, which Ambroz said offer “more diversified, core global equity exposure”.
Meanwhile, the MPS team has bolstered its fixed income exposure, allocating to sovereign bonds and cash in place of longer duration corporate credit.
It exited its position in the Liontrust SF Monthly Income Bond fund, in a move aimed to reduce overall duration within the portfolios’ credit exposure, and to fund the additions to sovereign bonds and cash, the MPS team said.
Reductions in alternatives exposure, especially in SDCL Energy Efficiency Income Trust and Invesco Physical Gold, were made to fund the fixed income additions.
Ambroz added: “Sovereign bonds are offering attractive yields and should provide downside protection in these more challenging market conditions. Within the alternatives exposure, the share prices of the real assets holdings have continued to struggle in the face of rising interest rates and the relative attractiveness of fixed income, despite generally robust operating performance.
“We continue to have conviction in the diversifying characteristics, sustainability credentials and exposure to inflation-linked revenue streams that our real assets allocation offers.”
The sustainable MPS houses six portfolios, with risk levels ranging from conservative to maximum growth.