Waverton’s latest MPS rebalance saw the firm up its fixed income weighting to neutral and shift equities to a “modest underweight” position.
The discretionary investment manager said the decision was taken due to the increasing risk of a US recession.
The London-based firm also scaled back its overweight position in absolute returns, while cash remains at 2% across its portfolios.
John Bellamy, head of adviser solutions, said: “While current consensus earnings forecasts do not reflect the negative impact a recession will have, there are still areas of exceptional value which could prove defensive even through a recession.”
Waverton MPS asset allocation post-rebalance
| Waverton Fund | Conservative | Defensive | Cautious | Balanced | Growth | Equity |
|---|---|---|---|---|---|---|
| Waverton Sterling Bond Fund | 40.7% | 35.6% | 28.8% | 20.8% | 15.3% | 0 |
| Waverton Strategic Equity Fund | 18.5% | 20.5% | 35.0% | 52.7% | 70.2% | 98.0% |
| Waverton Absolute Return Fund | 26.5% | 23.4% | 16.9% | 10.2% | 1.5% | 0 |
| Waverton Real Assets Fund | 12.3% | 18.5% | 17.3% | 14.4% | 11.0% | 0 |
| Cash | 2.0% | 2.0% | 2.0% | 2.0% | 2.0% | 2.0% |
In Q3, Waverton’s six portfolios produced returns of between 1.86% in it’s equity portfolio and -2.86% for the conservative portfolio.
Parmenion and Quilter both undertook similar MPS rebalances in recent weeks in response to adverse economic conditions.
In October, Quilter upped the weighting of traditional fixed income in its WealthSelect portfolios due to the “challenging economic backdrop” in the UK.
Adviser platform Parmenion added to index-linked bonds across its portfolios after also expecting a recession.
