Smith & Williamson MPS makes growth move with additions of Monks Investment Trust and L&G UK 100 Index

by | Aug 19, 2021

Smith & Williamson Investment Management’s Managed Portfolio Service (MPS) has initiated new positions in Monks Investment Trust and Legal & General UK 100 Index, as the team looks to temper their value slant which has been in place for some time.

To fund the positions, the team has sold the Man GLG Undervalued Assets strategy and cut its position in the Artemis US Extended Alpha fund.

“Across the board we remain very positive on UK equities as a whole, and although the Undervalued Assets fund could benefit from its positioning in the mid-cap space, we were conscious that a number of our more growth focused managed portfolios were skewing towards value,” said James Burns, co-manager of Smith & Williamson Investment Management’s MPS.

“Although the L&G 100 Index Trust does naturally have some exposure to value stocks, it is overall more balanced and we think, along with our other positions in Ninety One UK Alpha and Artemis UK Select, it is well-placed to benefit from the continued UK recovery,” he added.

The team also sold positions in RWC Enhanced Income in two portfolios, moving the resulting capital into the RWC UK Equity Income strategy.

“Although the RWC Enhanced Income fund provides a good yield, the strategy’s call option means it has a capped upside. We moved to the RWC UK Equity Income fund instead, which continues to provide yield but also is able to benefit more from its equity positions,” Burns said.

Elsewhere, in more growth focused portfolios the team cut positions in the Artemis US Extended Alpha and initiated a position in the Monks Investment Trust.

“The Monks Investment Trust, whilst not being an explicit US play, has a large portion of the portfolio in the US and is focused on areas we believe future growth is going to come from,” Burns said.

In Emerging Markets, the team exited positions in Schroders Asia Total Return in favour of the PineBridge Asia ex Japan Small Cap Equity Fund.

“We were conscious that we held two Schroders strategies in our Equities – Developing allocation, and therefore initiated a position in the PineBridge Fund to diversify manager risk,” Burns said.

In the fixed income allocations, the team reduced corporate bond exposure in three portfolios by exiting positions in the Royal London Corporate Bond.

“We continue to believe that fixed income in general remains unappealing, and we remain underweight in fixed income in favour of alternatives and equities,” Burns said.

In alternatives the team increased allocations towards Neuberger Berman Uncorrelated Strategies across the board, using capital from a reduction in positions of BH Macro.

“In addition to the Neuberger Berman Uncorrelated Strategies top up, we also added to our positions in the Empiric Student Property REIT in two portfolios, as well as initiating a new position in Empiric in another portfolio,” Burns said.

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