Investment Strategies
Evelyn Reshuffles Asset Allocation, Smiles On US Stocks, UK Government Bonds
The UK wealth management firm updates investors on how it has changed its investment stance. One feature was that it wants to spread US stocks' exposure, given the current dominance of the "Magnificent Seven" Big Tech names in the US equities market.
UK wealth management firm Evelyn Partners,
which oversees £59.1 billion ($74.9 billion) in assets, said it
has added exposures in UK government bonds (gilts) and US
equities.
The adjustment saw US equities increased while exposure to UK
equities and, to a lesser degree, Europe was reduced, Evelyn said
in a statement yesterday. The firm raised sovereign bond exposure
at the cost corporate bonds, continuing the trend since October
2022 of steadily increasing the weighting to government bonds
across the risk profiles.
The changes were enacted by the Evelyn Partners Core Managed
Portfolio Service team.
A period of rising interest rates – which may have peaked – has
boosted attractions of government bonds after an earlier period
of painful adjustment, given that the “risk-free” rate – as
measured by entities such as US Treasuries – is between 4 and 5
per cent. Strong gains to US equities, led by Big Techs such as
Amazon, Apple and Microsoft, has also prompted the firm to
diversify to avoid overly concentrated positions.
“There is a huge amount of market noise now around the AI boom,
and the surging ‘Magnificent Seven’ stocks that are driving US
and even global indices higher,” James Burns, lead manager of the
Evelyn Partners Core MPS, said. “With positions already
benefiting from this trend, we believe there is value in seeking
exposure to other areas of the US stock market where gains could
broaden out from big tech.”
“Meanwhile, we see short-to-medium dated gilts as the area of the
bond market that offers best value at the moment, so within fixed
income, we’re seeking more exposure there,” Burns said.
Evelyn Partners said new positions have been taken in the Miton
US Opportunities fund and two ETFs, iShares Up To 10 Years
Index-Linked Gilt Index and iShares Up To 10 Years Gilts Index.
