Quilter's WealthSelect Adds To Fixed Income Across Range

Cash and equities have been sold in favour of traditional fixed income through the HSBC Global Government Bond Index fund in all risk levels, bar level 10.

Stuart Clark, portfolio manager of WealthSelect explained: "The portfolios have been underweight fixed income for some time now, but conditions are changing and the asset class does look as attractive as it has for some time.

"Given where yields are and that inflation should be at or near its peak, we felt it was prudent to add back to this exposure at a time where equities have a greater possibility of disappointing."

Higher-grade credit funds held within the portfolio have also been topped up.

WealthSelect has made the move following increased geopolitical tension amid Russia's invasion of Ukraine, persistent inflation and concerns about how central banks will be able to tackle the issues without constraining their economies at the same time.

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The same move has been made within WealthSelect's Responsible and Sustainable ranges, but solely at the expense of global equities within the Sustainable range.

Within the Active Responsible portfolios and the Sustainable Range, government bond exposure will be achieved through the Aviva Investors Global Sovereign Bond fund.

Meanwhile, WealthSelect's Sparinvest Ethical Global Value Fund has been added to the Responsible Active and Blend portfolios giving them more exposure to the value sector of the market.

Clark commented on the economic situation as whole: "Central banks, and the Federal Reserve in particular, have what can only be described as a near impossible job. Inflation has remained stubbornly high and will do for some time to come, while global growth is looking increasingly threatened…While central banks are in hiking mode for now, it won't be long until they have to pause and potentially reverse course."

He continued: "We are in an environment of slowing global growth and high inflation. Companies are going to take a hit to their earnings, and it is clear they are facing real squeezes in their margins. Once we have a steady flow of weak corporate growth, or worse profit warnings, markets may experience another bout of uncomfortable volatility."

 

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