The UK wealth manager has made a number of changes to handle uncertainty.

Last week, St James’s Place said it had boosted exposure to inflation-linked sovereign bonds, small-cap equities and cut equity exposure for its “InRetirement” fund range. 

Without talking explicitly about the UK or wider world’s challenge of persistent inflation, the UK-listed firm said the changes, taking effect in April, were designed to make portfolios more diversified and improve risk-adjusted outcomes.

“By refining defensive exposures, increasing diversification within equities and rebalancing where valuations and return prospects have evolved, we believe portfolios are better positioned to navigate uncertainty while remaining firmly focused on long-term client outcomes,” Robin Ellis, director of multi-asset portfolio management at St James’s Place, said.

The wealth manager said its overall sovereign bond allocation was unchanged.

On small-cap equities, it said allocations have risen by 2 to 8 percentage points, depending on the fund’s objectives and risk profile.

“Small-cap equities remain attractively valued relative to large-caps and offer broader market exposure at a time when major equity indices have become increasingly concentrated,” the firm said. “The increase in small-cap exposure is largely funded by a reduction in large-cap equities, particularly in the US, widening the set of potential long-term return drivers within portfolios.”

These changes have been implemented across SJP’s multi-asset fund ranges, including Polaris, Polaris Multi-Index and the InRetirement funds, SJP said.

See this article for a discussion of how wealth managers can give clients an option when there is inflation and sluggish growth, and worries about market risk.