James Burns at Evelyn Partners has rejigged the team’s Core portfolios in favour of government bonds. 

He announced several changes to the portfolios, including an increased exposure to Treasuries and a move away from corporate bonds, which he thinks no longer provide the same level of insurance as their government counterparts. 

Evelyn expanded its exposure to two funds here: Vanguard US Government Bond Index and CG Dollar. The former is by far the most popular fixed income product among the DFMs we cover, held by  an impressive 12 fund selectors in total - though we suspect this is due to the sheer lack of competition in the Treasury fund world where it absolutely dominates. 

Burns puts the recent rebalance down to interest rates potentially peaking in developed markets and offering a level of portfolio protection in event of a downturn. 

“Government bonds remain compelling, as well as offering attractive real yields they should also provide a level of portfolio insurance were a growth shock to occur,” he says.

To make way, he reduced Evelyn’s exposure to corporate bonds, absolute return funds, and real assets. 

Lazard Global Listed Infrastructure, which comprised 2 per cent of Evelyn’s three most defensive portfolios, was ditched entirely, leaving Sanlam Real Assets as the only real assets type fund within the portfolios. 

That leaves just two of the allocators we cover invested in the Lazard infrastructure fund. 

Another switch involved reducing exposure away from UK equity and into US funds: Burns has bought a new holding in GQG US Equity, which he says is well placed to capture what he thinks will be a broadening out of the investment opportunities resulting from artificial intelligence, such a broadening will mean more stocks benefit, rather than the narrow band of about seven which have driven the gains so far this year.  

Joe Wilkins is a freelance journalist