Evelyn Partners has cut equities exposure in its Active Managed Portfolio Service (MPS) in favour of bonds and alternatives.
The firm described the asset allocation shifts made by lead portfolio manager James Burns (pictured) and the team as “sizeable changes”.
The rebalance is the first in a year, and was primarily driven by updates to the Dynamic Planner asset allocation framework, Evelyn Partners said.
The cut to equities was express across a number of underlying funds, including via an exit from NinetyOne UK Alpha and Federated Hermes Global Emerging Markets, and reductions to BNY Mellon US Equity Income, Vanguard US Equity Index, JPMorgan Japan and Jupiter Japan Income.
The increased bonds funds included Sanlam International Inflation Linked Bond, iShares Up to 10 Years Gilts, Vanguard UK Government Bond Index, M&G Emerging Markets Bond, and SSGA SPDR Bloomberg Global Aggregate Bond.
Alternatives funds increases included Sequoia Economic Infrastructure Income, while there were new positions introduced in Fulcrum Diversified Absolute Return and Cordiant Digital Infrastructure.
Burns said: “At the headline level equities have been reduced significantly in all models apart from Dynamic Growth where there was only a small reduction. Bonds and alternatives have been correspondingly increased.
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“Within the equity allocations sizeable cuts were made to the UK and US whilst Europe, Japan and Asia/Emerging Markets generally saw increases.
“Two holdings were exited entirely, NinetyOne UK Alpha and Federated Hermes Global Emerging Markets, whilst the Vanguard Emerging Markets Stock Index fund, a tracker, was introduced.
“The bond allocation saw some major changes with UK government bonds being increased at the expense of US government bonds.
“We believe that UK gilts look more attractive than US treasuries as we see there being greater scope for growth concerns to come through in the UK which would lead to interest rate cuts, whilst the growth picture in the US remains more robust,” Burns continued.
“There is also the possibility that US government bonds’ status as the ultimate safe haven assets may be called into question following President Trump’s recent tariff announcements. Corporate bonds were also reduced as we see less downside protection in them versus government bonds.
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