Key Takeaways
- • Evelyn Partners reduced equity exposure across its Active Managed Portfolio Service (MPS) in favour of bonds and alternatives in the first rebalance in a year, driven by updates to the Dynamic Planner asset allocation framework.
- • Equity cuts were applied across multiple underlying funds, including complete exits from NinetyOne UK Alpha and Federated Hermes Global Emerging Markets, with reductions to US and UK equity positions across BNY Mellon US Equity Income, Vanguard US Equity Index, and JPMorgan/Jupiter Japan funds.
- • Bond allocations increased significantly, with additions to Sanlam International Inflation Linked Bonds, iShares Up to 10 Years Gilts, Vanguard UK Government Bond Index, and M&G Emerging Markets Bonds, reflecting a shift toward UK government bonds at the expense of US government bonds.
- • Alternative asset positions were expanded with increased allocation to Sequoia Economic Infrastructure Income and new introductions of Fulcrum Diversified Absolute Return and Cordiant Digital Infrastructure.
- • Lead portfolio manager James Burns characterised the rebalance as featuring "sizeable" equity reductions across all model portfolios except Dynamic Growth, which saw only small equity cuts, with material shifts in geographic equity exposure favoring Europe, Japan, and Asia/Emerging Markets over UK and US equities.
Summary
Evelyn Partners has executed a significant portfolio rebalance of its Active Managed Portfolio Service (MPS), marking the first material asset allocation adjustment in a year. The rebalance, led by portfolio manager James Burns, reflects a strategic pivot away from equities toward bonds and alternative assets, driven by updates to the firm's Dynamic Planner asset allocation framework. The firm characterised the shifts as "sizeable changes," signalling a meaningful repositioning of risk exposure across its model portfolios.
The equity reduction was implemented across multiple underlying fund holdings with varying intensity. The firm completely exited two positions: NinetyOne UK Alpha and Federated Hermes Global Emerging Markets. Significant reductions were made to established US and UK equity exposures through BNY Mellon US Equity Income, Vanguard US Equity Index, and Japanese equity funds including JPMorgan Japan and Jupiter Japan Income. Notably, the firm introduced Vanguard Emerging Markets Stock Index, a tracker fund, as a replacement for the active Federated Hermes holding. The Dynamic Growth model portfolio experienced only modest equity cuts, suggesting a more measured reduction for growth-oriented investors compared to other model variants.
Bond allocations saw substantial increases reflecting a shift toward defensive positioning and duration management. New and increased bond positions included Sanlam International Inflation Linked Bonds, iShares Up to 10 Years Gilts, Vanguard UK Government Bond Index, M&G Emerging Markets Bonds, and SSGA SPDR Bloomberg Global Aggregate Bond. Burns specifically noted that UK government bonds were increased at the expense of US government bonds, indicating a geographic tactical rotation within fixed income markets. This rebalancing suggests a reduction in duration risk while maintaining exposure to inflation-linked instruments and emerging market credit.
Alternative asset exposure was expanded through increased allocation to Sequoia Economic Infrastructure Income and new positions in Fulcrum Diversified Absolute Return and Cordiant Digital Infrastructure. These additions reflect the firm's confidence in non-correlated asset classes as diversification tools within the overall MPS framework. Geographically, equity exposures to Europe, Japan, and Asia/Emerging Markets generally increased relative to UK and US positions, signalling a shift in regional preferences within the equity sleeve that partially offset the headline reduction in total equity exposure.
The equity reduction was implemented across multiple underlying fund holdings with varying intensity. The firm completely exited two positions: NinetyOne UK Alpha and Federated Hermes Global Emerging Markets. Significant reductions were made to established US and UK equity exposures through BNY Mellon US Equity Income, Vanguard US Equity Index, and Japanese equity funds including JPMorgan Japan and Jupiter Japan Income. Notably, the firm introduced Vanguard Emerging Markets Stock Index, a tracker fund, as a replacement for the active Federated Hermes holding. The Dynamic Growth model portfolio experienced only modest equity cuts, suggesting a more measured reduction for growth-oriented investors compared to other model variants.
Bond allocations saw substantial increases reflecting a shift toward defensive positioning and duration management. New and increased bond positions included Sanlam International Inflation Linked Bonds, iShares Up to 10 Years Gilts, Vanguard UK Government Bond Index, M&G Emerging Markets Bonds, and SSGA SPDR Bloomberg Global Aggregate Bond. Burns specifically noted that UK government bonds were increased at the expense of US government bonds, indicating a geographic tactical rotation within fixed income markets. This rebalancing suggests a reduction in duration risk while maintaining exposure to inflation-linked instruments and emerging market credit.
Alternative asset exposure was expanded through increased allocation to Sequoia Economic Infrastructure Income and new positions in Fulcrum Diversified Absolute Return and Cordiant Digital Infrastructure. These additions reflect the firm's confidence in non-correlated asset classes as diversification tools within the overall MPS framework. Geographically, equity exposures to Europe, Japan, and Asia/Emerging Markets generally increased relative to UK and US positions, signalling a shift in regional preferences within the equity sleeve that partially offset the headline reduction in total equity exposure.
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