After a 10-month track record, we have decided to publish the first report on our different model portfolios. We will update you on a monthly and quarterly basis on performance and activity reports.

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 do not hesitate to contact us.

WSP Model Portfolios are built from our universe of selected Ucits funds and allocation is actively managed.

The aim is to demonstrate, through an optimal combination of strategies, that carefully selected active fund managers have the ability to deliver added-value over the long run while keeping a full exposure and constant asset allocation within the following risk-profiles.

Portfolios Structure

• Portfolios are made up of 14 to 17  Ucits or Alternative Ucits funds (according to profile).

• We have started two currency based family of portfolios ; in US dollar and in Euro. Swiss Francs will follow shortly

• Apart one fund with a bi-monthly liquidity, all funds have a daily liquidity.

• Usually we select the same funds for USD or EUR portfolios, unhedged for equity strategies and hedged for fixed income ones.

• The performances are shown net of fees, using the institutional share classes, making these Model Portfolios fully replicable.

Yield & Income Portfolio

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.

Growth Portfolio

The most equity oriented portfolio with an objective 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.

Allocations

As mentioned above, we keep a constant balance between equity and fixed income strategies according to the Model Portfolios profiles and guidelines. We also maintain a neutral currency and regional allocation versus benchmarks.

Portfolios outperformance should mainly arise from the alpha generated by the active management. Tactical bets such as investment style (value, growth defensive), sector allocation (e.g., commodities, real estate), interest or spread duration might also contribute time to time to the value added generation.

While we intentionally favoured the value style in equities since the launch of the Model Portfolios, we remained cautious in interest rate duration, investing predominantly in floating rate strategies providing interesting carry (senior secured loans and non-agency MBS) with limited duration risks.

With regard to sector allocation, we added some energy exposure through a MLP strategy.

Performance Review

Period from 30 May 2016 to 31 March 2017

We are pleased to observe that most of our outperformance came from the alpha generated by the selected asset managers.

Among the 27 funds we have in the different Model Portfolios, 21 funds had an excess return versus their respective benchmarks.

The value tilt as well as the short interest rate duration contributed strongly to the performance.

On the other hand, a few defensive equity funds that we have in the Yield & Income and in the Balanced Model portfolios proved to cost slightly in performance.  A normal outcome in an risk-off environment characterised by high positive returns and low volatility.

Outlook

The growing uncertainties with regard to the French election makes us slightly more cautious for the next few weeks.

In these circumstances, the financial sector and cyclical industries might be particularly vulnerable. Although we will keep a value bias, we decided to take some profit on the highest beta equity funds.

We will keep our exposure to long-dated developed government bonds unchanged in our Growth Model Portfolio. This position was initiated as a natural hedge for high octane equity funds in a risk-off environment.

Depending on the evolution of the French election we will keep a close eye on the financial sector. Any outcome viewed positively by the financial markets could mark the start of a strong rally for banks and particularly for the subordinated financials which are currently yielding very favourably versus the high yield corporate market.

Source: WS Partners, Morningstar

Source: WS Partners, Morningstar

Source: WS Partners, Morningstar

Source: WS Partners, Morningstar

Source: WS Partners, Morningstar

Source: WS Partners, Morningstar