WSP Model Portfolios are built from our universe of selected active Ucits funds. We manage actively the allocation according to current and expected market conditions and taking into consideration the fund managers’ exposure.
The aim is to demonstrate that an optimal combination of strategies, coupled with a careful selection of active fund managers, have the ability to deliver added-value to investors over the long run, while keeping a full exposure and constant asset allocation within the given investment profiles.
More detailed reporting including portfolio quantitative and qualitative data are available to customers having subscribed to the WS Partners Model Portfolio Services. Would you request more information on this service, please contact us.
Portfolios Structure
- Portfolios are made of 14 to 17Â Ucits or Alternative Ucits funds (according to profile).
- Two currency based portfolios ; in US dollar or in Euro.
- Apart one fund with a bi-monthly liquidity, all funds have a daily liquidity.
- Usually we select identical funds either for US dollar or Euro based portfolios, but keeping currency exposure hedge for fixed income funds.
- The performances are shown net of fees, calculated from the cheapest share classes, hence making our Model Portfolios fully replicable.
Strategic Allocations
We keep a constant balance between equity and fixed income strategies according to Model Portfolio profiles and guidelines. We also maintain a neutral currency and regional allocation compare to benchmarks.
The portfolio outperformance should mainly arise from the alpha generated by active management, and to a certain extent to a diversification optimisation. Tactical bets such as investment style (value, growth defensive), sector allocation (e.g., commodities, real estate), interest rate or spread duration may also contribute, time to time, to the value added generation.
A conservative portfolio with a 1/3 equity and 2/3 fixed income allocation.
Within the equity universe we tend to favour yielding strategies rather than pure price appreciation funds.
The objective is to outperform over time a benchmark composed by 1/3 of the MSCI All Country World Index, and by 2/3 of the Barclays Global Aggregate Bond Index.
The portfolio aims to outperform a benchmark made of 50% MSCI All Country World Index, and 50% Barclays Global Aggregate Bond Index in a risk-adjusted return basis and with a capital preservation mindset.
For that reason, we maintain around 33% of the portfolio allocation into Absolute Return strategies, including Alternative Ucits funds.
The most equity oriented portfolio with the aim to beat a benchmark composed by 2/3 of the MSCI All Country World Index and 1/3 of the Barclays Global Aggregate Bond Index. Growth of capital through capital appreciation is the main long term portfolio objective.
Market Review and Outlook
Market Review – October 2020
The third quarter emphasised the benefits of geographic diversification. Asian equities returned over 10% and are the joint best-performing equity region year to date, up over 5%. Meanwhile, UK equities fell 3% and are down 20% year to date. European equities also lagged the rest of the world, with returns of 2% and -7% for the quarter and year to date, respectively. US equities delivered nearly 9% over the quarter and over 5% this year.
US growth stocks, which have benefited from the shift online caused by Covid-19 this year, came under some pressure in early September, having had a good quarter until then. With valuations still high by historical standards, a vaccine-driven rotation could potentially lead growth stocks to underperform cheaper stocks. On the other hand, value stocks remain particularly exposed to the worst-case scenario of a bad winter without positive vaccine news.
On the monetary policy front, the big news over the quarter was the Federal Reserve’s shift to average inflation targeting, allowing inflation to run above target for a while to compensate for periods of below-target inflation. The key implication is that rates are likely to remain lower for even longer. US 10-year Treasuries ended the quarter with a yield of 0.7%, broadly flat over the quarter but down from 1.9% at the start of the year.
Outlook
The final quarter of the year could be particularly eventful. By January, we should know the outcome of the US election, whether a no-deal Brexit was avoided and whether US Congress has passed more fiscal stimulus. Most importantly, there is a good chance that we will get news on a vaccine. For now, we continue to believe the focus should be on diversification, both regionally and by asset class, with alternative and targeted absolute return strategies playing an increasingly important role in portfolio diversification. In this regard we are currently looking for new absolute return strategies in fixed income and multi-assets.
Performance Review – October 2020
The MSCI ACWI (USD) was down -3.1% during the month while the Barclays Global Aggregate index (USD hedged) was up +0.4%.
Active management had a positive contribution. Over the 27 funds we have in the portfolios, 18 were outperforming their respective benchmark. Alpha generation were evenly distributed between fixed income and equity strategies.
In absolute terms, the Balanced portfolio (-0.2%) outperformed the Growth portfolio (-0.4%) and the Yield & Income portfolio (-0.5%).
Yield & Income Portfolio (USD)
The portfolio outperformed its benchmark by +35bps in October. The portfolio was slightly hurt by our overweight exposure in EM debt. On the other side the growth bias in equities was contributing to performance. Active management was however the main driver of relative performance with a net positive contribution of +42bps.
Balanced Portfolio (USD)
The portfolio outperformed its benchmark (-0.2% vs -1.2%). Absolute return did well during the month. Particularly the two long/short strategies we added in September (+0.4% and +2.9% respectively). The merger arbitrage strategy was also in positive territory (+0.5%). Finally, the contribution of active management was the most important factor to the performance (+71bps).
Growth Portfolio (USD)
The Growth portfolio was outperforming its benchmark by +122bps in October. Our growth bias in equities (US Small Cap fund was up 3.1% for instance), the Healthcare exposure as well as our overweight in EM equities were positive contributors. Active management has also a positive effect of +64bps.
US Dollar Portfolios
USD - Yield and Income
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | 0,19% | -2,47% | -10,45% | 6,50% | 4,71% | 2,76% | 3,30% | 2,59% | -1,03% | -0,48% | 4,67% | ||
| Benchmark | 0,81% | -1,89% | -5,60% | 4,64% | 1,62% | 1,37% | 2,46% | 1,45% | -0,80% | -0,83% | 2,91% | |||
| Portfolio | 2019 | 4,59% | 1,67% | 0,63% | 1,97% | -2,39% | 2,91% | 0,90% | -1,11% | 0,95% | 1,69% | 1,37% | 2,17% | 16,26% |
| Benchmark | 3,39% | 0,96% | 1,58% | 1,16% | -1,02% | 3,11% | 0,61% | 0,71% | 0,37% | 0,79% | 0,72% | 1,01% | 14,14% | |
| Portfolio | 2018 | 2,88% | -1,91% | -0,66% | 0,76% | -0,63% | -0,50% | 1,50% | -0,20% | 0,71% | -3,54% | -0,22% | -2,48% | -4,36% |
| Benchmark | 1,42% | -1,55% | -0,21% | 0,07% | 0,26% | -0,04% | 1,00% | 0,42% | -0,12% | -2,63% | 0,80% | -1,48% | -2,12% | |
| Portfolio | 2017 | 2,15% | 1,58% | 0,72% | 1,01% | 1,27% | 0,19% | 1,55% | 0,03% | 0,58% | 1,05% | 0,61% | 1,07% | 12,45% |
| Benchmark | 0,68% | 1,49% | 0,35% | 0,95% | 1,10% | -0,06% | 1,13% | 0,71% | 0,32% | 0,95% | 0,73% | 0,63% | 9,36% | |
| Portfolio | 2016 | 1,16% | 2,25% | 1,04% | 0,86% | -0,43% | -1,25% | 1,25% | 4,93% | |||||
| Benchmark | 1,04% | 1,81% | 0,06% | 0,17% | -1,23% | -0,86% | 0,84% | 1,81% |
Benchmark: 1/3 iShares MSCI All Country World ETF (EUR) + 2/3 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar
USD - Balanced
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | -0,68% | -2,98% | -8,44% | 5,95% | 3,34% | 2,14% | 3,08% | 2,52% | -0,96% | -0,17% | 3,08% | ||
| Benchmark | 0,33% | -3,43% | -7,62% | 6,15% | 2,29% | 1,82% | 3,15% | 2,60% | -1,43% | -1,24% | 1,95% | |||
| Portfolio | 2019 | 4,01% | 1,50% | 0,36% | 1,64% | -2,65% | 2,65% | 0,92% | -1,37% | 1,24% | 1,94% | 1,43% | 1,99% | 14,36% |
| Benchmark | 4,50% | 1,38% | 1,48% | 1,71% | -2,24% | 3,97% | 0,54% | -0,06% | 0,80% | 1,28% | 1,15% | 1,63% | 17,18% | |
| Portfolio | 2018 | 2,75% | -1,59% | -0,42% | 0,82% | -0,97% | -0,54% | 1,49% | -0,32% | 0,78% | -3,58% | -0,07% | -2,11% | -3,84% |
| Benchmark | 2,47% | -2,21% | -0,73% | 0,31% | 0,22% | -0,15% | 1,50% | 0,48% | 0,02% | -3,84% | 0,96% | -2,88% | -3,96% | |
| Portfolio | 2017 | 1,85% | 1,21% | 0,74% | 0,84% | 0,87% | 0,64% | 1,73% | 0,04% | 1,19% | 1,03% | 0,93% | 0,66% | 12,35% |
| Benchmark | 1,19% | 1,82% | 0,56% | 1,10% | 1,37% | 0,07% | 1,54% | 0,63% | 0,72% | 1,23% | 1,02% | 0,88% | 12,82% | |
| Portfolio | 2016 | 0,01% | 2,83% | 0,94% | 0,65% | -0,55% | 0,36% | 1,59% | 5,93% | |||||
| Benchmark | 0,62% | 2,43% | 0,12% | 0,28% | -1,35% | -0,46% | 1,17% | 2,81% |
Benchmark: 1/2 iShares MSCI All Country World ETF (EUR) + 1/2 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar
USD - Growth
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | -0,68% | -4,30% | -9,68% | 8,05% | 3,42% | 2,83% | 4,24% | 3,53% | -1,30% | -0,43% | 4,63% | ||
| Benchmark | -0,16% | -4,98% | -9,63% | 7,67% | 2,96% | 2,26% | 3,84% | 3,75% | -2,06% | -1,65% | 0,86% | |||
| Portfolio | 2019 | 6,20% | 2,06% | 0,71% | 2,39% | -4,35% | 4,44% | 0,61% | -2,00% | 0,95% | 2,30% | 2,02% | 2,51% | 18,89% |
| Benchmark | 5,61% | 1,81% | 1,38% | 2,27% | -3,47% | 4,83% | 0,46% | -0,83% | 1,23% | 1,77% | 1,57% | 2,25% | 20,23% | |
| Portfolio | 2018 | 3,65% | -2,87% | -1,07% | 0,82% | -0,44% | -1,19% | 1,66% | 0,54% | 0,00% | -6,66% | 0,64% | -4,12% | -9,06% |
| Benchmark | 3,53% | -2,87% | -1,24% | 0,54% | 0,17% | -0,26% | 2,00% | 0,55% | 0,16% | -5,05% | 1,13% | -4,28% | -5,81% | |
| Portfolio | 2017 | 2,83% | 1,52% | 1,28% | 1,65% | 1,88% | 0,46% | 2,48% | -0,28% | 1,77% | 1,50% | 1,22% | 1,64% | 19,45% |
| Benchmark | 1,70% | 2,14% | 0,78% | 1,25% | 1,65% | 0,19% | 1,95% | 0,54% | 1,12% | 1,51% | 1,32% | 1,12% | 16,37% | |
| Portfolio | 2016 | -1,01% | 4,18% | 1,46% | 1,17% | -1,04% | 0,28% | 1,33% | 6,44% | |||||
| Benchmark | 0,21% | 3,05% | 0,19% | 0,39% | -1,47% | -0,06% | 1,50% | 3,80% |
Benchmark: 2/3 iShares MSCI All Country World ETF (EUR) + 1/3 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar
Euro Portfolios
Euro - Yield and Income
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | 0,53% | -2,09% | -10,15% | 6,30% | 3,67% | 2,35% | 1,21% | 2,26% | -0,36% | -0,38% | 2,49% | ||
| Benchmark | 1,13% | -1,73% | -5,70% | 4,62% | 1,04% | 1,00% | 0,61% | 1,11% | -0,20% | -0,66% | 0,92% | |||
| Portfolio | 2019 | 4,15% | 1,82% | 1,00% | 1,86% | -2,37% | 1,85% | 1,52% | -0,82% | 1,13% | 0,67% | 1,75% | 1,25% | 14,54% |
| Benchmark | 3,06% | 1,06% | 1,89% | 1,05% | -1,02% | 2,15% | 1,22% | 0,92% | 0,56% | -0,15% | 1,00% | 0,23% | 12,58% | |
| Portfolio | 2018 | 1,46% | -1,36% | -1,10% | 1,26% | 0,42% | -0,66% | 1,26% | -0,03% | 0,64% | -2,96% | -0,39% | -2,99% | -4,49% |
| Benchmark | 0,04% | -0,99% | -0,65% | 0,53% | 1,28% | -0,21% | 0,78% | 0,45% | -0,21% | -2,02% | 0,66% | -1,98% | -2,37% | |
| Portfolio | 2017 | 1,24% | 2,08% | 0,35% | 0,20% | 0,10% | -0,38% | 0,23% | -0,41% | 0,61% | 1,46% | -0,20% | 0,56% | 5,97% |
| Benchmark | -0,24% | 2,01% | 0,03% | 0,26% | -0,09% | -0,64% | -0,11% | 0,31% | 0,41% | 1,35% | -0,17% | 0,26% | 3,39% | |
| Portfolio | 2016 | 1,12% | 2,05% | 1,00% | 0,53% | 0,20% | -0,23% | 1,34% | 6,16% | |||||
| Benchmark | 1,03% | 1,51% | 0,11% | -0,22% | -0,52% | 0,14% | 0,92% | 3,00% |
Benchmark: 1/3 iShares MSCI All Country World ETF (EUR) + 2/3 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar
Euro - Balanced
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | 0,13% | -2,42% | -8,89% | 5,87% | 2,62% | 1,74% | 1,18% | 2,18% | -0,36% | -0,06% | 1,31% | ||
| Benchmark | 0,88% | -3,11% | -7,66% | 6,19% | 1,46% | 1,29% | 0,45% | 2,12% | -0,50% | -0,95% | -0,43% | |||
| Portfolio | 2019 | 3,70% | 1,71% | 0,84% | 1,56% | -2,56% | 1,43% | 1,41% | -1,09% | 1,43% | 0,91% | 1,80% | 1,08% | 12,81% |
| Benchmark | 4,15% | 1,66% | 2,07% | 1,69% | -2,11% | 2,68% | 1,56% | 0,37% | 1,20% | -0,01% | 1,66% | 0,59% | 16,49% | |
| Portfolio | 2018 | 1,08% | -0,82% | -0,91% | 1,60% | 0,42% | -0,67% | 1,30% | -0,19% | 0,71% | -2,76% | -0,21% | -2,66% | -3,16% |
| Benchmark | 0,48% | -1,28% | -1,26% | 1,10% | 1,86% | -0,28% | 1,28% | 0,65% | -0,01% | -2,80% | 0,88% | -3,48% | -2,97% | |
| Portfolio | 2017 | 0,67% | 1,98% | 0,39% | -0,11% | -0,71% | -0,09% | 0,02% | -0,47% | 1,34% | 0,99% | -0,12% | 0,19% | 4,12% |
| Benchmark | -0,12% | 2,65% | 0,16% | 0,13% | -0,33% | -0,72% | -0,22% | 0,12% | 0,93% | 1,91% | -0,23% | 0,41% | 4,72% | |
| Portfolio | 2016 | 0,27% | 2,48% | 1,02% | 0,24% | 0,35% | 1,68% | 1,74% | 8,02% | |||||
| Benchmark | 0,67% | 2,03% | 0,27% | -0,24% | -0,20% | 1,13% | 1,38% | 5,13% |
Benchmark: 1/2 iShares MSCI All Country World ETF (EUR) + 1/2 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar
Euro - Growth
Cumulative Performance to end October 2020
Calendar Returns
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2020 | 0,07% | -3,99% | -9,51% | 7,92% | 2,08% | 2,18% | 0,65% | 2,86% | -0,13% | -0,14% | 1,05% | ||
| Benchmark | 0,63% | -4,49% | -9,63% | 7,76% | 1,88% | 1,58% | 0,28% | 3,13% | -0,80% | -1,24% | -1,86% | |||
| Portfolio | 2019 | 5,86% | 2,49% | 1,58% | 2,40% | -4,08% | 2,86% | 1,87% | -1,50% | 1,46% | 0,72% | 2,68% | 1,14% | 18,57% |
| Benchmark | 5,24% | 2,25% | 2,25% | 2,32% | -3,20% | 3,21% | 1,90% | -0,19% | 1,84% | 0,12% | 2,32% | 0,94% | 20,48% | |
| Portfolio | 2018 | 1,10% | -1,62% | -1,45% | 1,97% | 1,78% | -1,28% | 1,39% | 0,87% | 0,07% | -5,27% | 0,55% | -4,81% | -6,81% |
| Benchmark | 0,93% | -1,56% | -1,86% | 1,67% | 2,43% | -0,35% | 1,78% | 0,85% | 0,20% | -3,58% | 1,10% | -4,97% | -3,61% | |
| Portfolio | 2017 | 1,24% | 2,58% | 0,76% | 0,29% | -0,22% | -0,54% | 0,21% | -0,93% | 2,03% | 1,56% | -0,28% | 0,98% | 7,90% |
| Benchmark | 0,00% | 3,28% | 0,29% | 0,00% | -0,56% | -0,81% | -0,34% | -0,08% | 1,45% | 2,46% | -0,29% | 0,57% | 6,05% | |
| Portfolio | 2016 | 0,00% | 3,88% | 1,55% | 0,66% | 0,46% | 2,35% | 1,69% | 11,03% | |||||
| Benchmark | 0,31% | 2,56% | 0,42% | -0,26% | 0,12% | 2,13% | 1,83% | 7,28% |
Benchmark: 2/3 iShares MSCI All Country World ETF (EUR) + 1/3 X II Barclays Gbl Agg ETF H EUR
Source: WS Partners, Morningstar