Quilter has announced that in the quarterly rebalance of its WealthSelect Managed Portfolio Service, which recently exceeded £20bn in assets under management, it has increased its allocation to fixed income, while allowing the equity allocation to reduce.
The firm said that while equity markets have rebounded since President Trump’s ‘liberation day’ on 2 April, the WealthSelect portfolio managers – Stuart Clark, Helen Bradshaw and Bethan Dixon – opted to maintain a tactical underweight to equities relative to the strategic asset allocation (SAA). The team believes that despite the rally, risks to growth and inflation remain elevated particularly in light of uncertainty around tariffs.
The WealthSelect Managed portfolios have seen a notable increase in fixed income exposure but have an underweight position versus their strategic asset allocation, with the managers preferring to retain a mix of cash, alternatives and fixed income.
Quilter said the increased allocation included the introduction of Vanguard Euro Government Bond Index Fund within the Managed portfolios. This reflected “the potential for economic and monetary policy divergence between Europe and the US, coupled with a weakening appetite for US government debt.”
“In Responsible, this was accessed through iShares Green Bond Index, providing exposure to predominantly European sovereign and corporates issuing bonds, whereby the proceeds are utilised to achieve a positive environmental outcome. Within the Sustainable portfolios, the allocation to Goldman Sachs Sovereign Green Bond was increased, and T.Rowe Price Global Impact Credit was added to.
“European equities, which have led global markets year-to-date, were trimmed to lock in profits and reduce the overall allocation. The proceeds from this reduction, as well as a small trim to Asia, were redirected to Emerging Markets and Japan. The team also maintained its UK overweight position and opted to increase mid cap domestic exposure via Quilter Investors UK Equity Opportunities, citing attractive valuations and improving operational momentum.”
Within the Sustainable portfolios, it added, equity allocations were adjusted to favour managers who focus on larger companies investing across broader opportunity sets, specifically within the global multi thematic theme with an increased position in Impax Global Social Leaders.
Commenting on the rebalancing, portfolio manager Helen Bradshaw, said: “While markets have rallied following Trump’s ‘liberation day’, we remain relatively cautious in our outlook. The portfolios have been rebalanced to acknowledge market momentum, but also to defend against the potential volatility stemming from the ever-changing geopolitical tensions, inflationary pressures, and uncertainty around global trade.
“With this in mind, we opted to add to fixed income via increased exposure to government bonds and global credit, though we are underweight relative to the recently adjusted SAA. We also allowed our equity allocation to reduce, maintaining the existing tactical underweight position.
“We remain committed to a long-term, disciplined investment philosophy that keeps our clients’ goals front and centre. In this environment, resilience and adaptability are key, and our portfolios are well positioned to deliver both.”
