Quilter’s WealthSelect Managed Portfolio Service (MPS) has increased its allocation to fixed income and reduced equity exposure, citing ongoing risks to growth and inflation.
WealthSelect portfolio managers Stuart Clark, Bethan Dixon and Helen Bradshaw have chosen to maintain a tactical underweight to equities relative to the strategic asset allocation, despite the fact equity markets have rallied since US president Donald Trump’s so-called ‘Liberation Day’, which saw the unveiling of a host of aggressive tariffs.
Instead, the team has notably increased the MPS’ fixed income exposure, although it is maintaining an underweight position versus the strategic asset allocation, favouring a blend of fixed income, alternatives and cash.
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.”
The rebalance included the addition of the Vanguard Euro Government Bond Index fund, which has been introduced to reflect the potential for divergence between European and US economic and monetary policy.
It also aims to account for a declining appetite for US government debt, both through the Vanguard fund and the iShares Green Bond Index. The latter provides exposure to predominantly European bonds whereby the proceeds are utilised to achieve a positive environmental outcome.
Within WealthSelect’s sustainable portfolios, the team added T.Rowe Price Global Impact Credit and increased its allocation to Goldman Sachs Sovereign Green Bond.
In addition, the managers have maintained the UK overweight position – opting to increase mid-cap domestic exposure via Quilter Investors UK Equity Opportunities – while trimming European equities and redirecting slightly to emerging markets and Japan.
“In this environment, resilience and adaptability are key, and our portfolios are well positioned to deliver both,” Bradshaw said.