Portfolios of Active Funds

WSP Model Portfolios are built from our universe of selected active Ucits funds and the allocation is actively managed by us according to current and expected market conditions and fund manager exposures.

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.

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.

Key Characteristics

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.

Strategic Allocations

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.

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.

Balanced Portfolio

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, the portfolio can be invested up to 33% in Absolute Return strategies, including Alternative Ucits funds.

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.

Review and Outlook – September 2017

Despite intermittent pull backs, in response to the ongoing escalation of geopolitical tensions with North Korea, global equities finished the month in positive territory. Recent data releases substantiated hawkish comments from various US Federal Reserve officials, heightening market expectations of a December interest rate hike. With the recent Republican proposal to overhaul the US tax code, these events lifted bond yields. This month equity markets were also characterised by a pronounced rotation away from the so far strongly performing tech sector, in favour of the energy sector.

In fixed income, September was on “risk on” mood. While the safest places like sovereign and IG credit suffered from the duration the credit market (HY, loans, structured products and EM debt) benefited from the spread tightening. The emerging markets debt in local currencies exhibited however a negative performance, the first after 9 consecutive positive months, due to the strengthening of the USD against all major currencies.

Since inception, the three Portfolio Models continue to be well above their respective benchmarks with outperformance ranging from +350bps up to +604bps. During September, all portfolios recorded positive alphas, reversing the previous month of negative alpha.

Outlook

At the end of September, we undertook several switches in all the portfolios. On a one-to-one basis, we replaced 7 funds based on our heighten alpha generation conviction for funds operating in the same sub-asset class. The overall structure of the portfolios remains unchanged.

We keep our risk-on mood which are expressed through:

  • An overweight in spread duration for all profile
  • A slight overweight in Emerging Markets both FI and Equities
  • A value bias for the Growth and Balanced portfolios

Performance Review – September 2017

In Equity, the MSCI World index finished positive at +2.24% during the month. Year-to-Date, the equity index is up by +16.0%.  In Fixed Income, the Barclays Global Aggregate index returned -0.46% in US dollar for the month, and is up +2.22% Year-to-Date.

Among the 28 funds we have in all Model Portfolios, 20 funds (71%) had an excess return versus their respective benchmarks for the month, while year to date, 21 funds (75%) are still recording excess returns.

In absolute terms, for the month of September the Growth portfolio recorded the strongest performance at + 1.77%, followed by the Balanced portfolio at +1.19%, and the Yield and income at +0.58%.

Yield & Income Portfolio (USD)

The portfolio outperformed its benchmark by 26 bps in September. The strategy benefited from its short duration, and its long credit spread duration biases in fixed income. Moreover, the active management were positive contributor, generating for 13bps of outperformance during the month. It is a reversal from the previous month where the same factors were detractor of performance.

Out of the 15 funds in the portfolio, 11 of them outperformed their benchmarks.

Balanced Portfolio (USD)

The balanced portfolio performed strongly, beating its benchmark by 47bps. We were happy to notice that this outperformance was exclusively due to the positive contribution of the active asset managers (+49bps during the month).

The Absolute Return pocket contributed to the portfolio’s outperformance with 3 out of 5 funds recording returns between +0.75% to +2.44% during the month. This pocket serves as an insurance premium to protect the portfolio’s return during flat to weak market conditions. It has well played its role during a mixed month for risky assets.

Overall in the portfolio, 14 funds outperformed their index while 3 lagged.

Growth Portfolio (USD)

The portfolio had the strongest absolute and relative performance in September (+1.77% and 65bps of outperformance). Alongside the positive contribution of active management (+48bps), the value bias in the equity pocket was also a positive factor.

In absolute terms, the Growth Portfolio record a return of +14.40% YTD, the strongest performance of the three strategies.

Out of the 15 funds in the portfolio, 12 of them outperformed their benchmarks.

US Dollar Portfolios

US Dollar - Yield and Income

Cumulative Performance to end September 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 2.15% 1.58% 0.72% 1.01% 1.27% 0.19% 1.55% 0.03% 0.58% 9.45%
Benchmark 0.68% 1.49% 0.35% 0.95% 1.10% -0.06% 1.13% 0.71% 0.32% 6.87%
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 MSCI All Country World + 2/3 Barclays Gbl Agg
Source: WS Partners, Morningstar


US Dollar - Balanced

Cumulative Performance to end September 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 1.85% 1.21% 0.74% 0.84% 0.87% 0.64% 1.73% 0.04% 1.19% 9.47%
Benchmark 1.19% 1.82% 0.56% 1.10% 1.37% 0.07% 1.54% 0.63% 0.72% 9.36%
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 MSCI All Country World + 1/2 Barclays Gbl Agg
Source: WS Partners, Morningstar


US Dollar - Growth

Cumulative Performance to endSeptember 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 2.83% 1.52% 1.28% 1.65% 1.88% 0.46% 2.48% -0.28% 1.77% 14.39%
Benchmark 1.70% 2.14% 0.78% 1.25% 1.65% 0.19% 1.95% 0.54% 1.12% 11.89%
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 MSCI All Country World + 1/3 Barclays Gbl Agg
Source: WS Partners, Morningstar

Euro Portfolios

Euro - Yield and Income

Cumulative Performance to end September 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 1.24% 2.08% 0.35% 0.20% 0.10% -0.38% 0.23% -0.41% 0.61% 4.07%
Benchmark -0.24% 2.01% 0.03% 0.26% -0.09% -0.64% -0.11% 0.31% 0.41% 1.93%
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 MSCI All Country World + 2/3 Barclays Gbl Agg
Source: WS Partners, Morningstar


Euro - Balanced

Cumulative Performance to end September 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 0.67% 1.98% 0.39% -0.11% -0.71% -0.09% 0.02% -0.47% 1.34% 3.03%
Benchmark -0.12% 2.65% 0.16% 0.13% -0.33% -0.72% -0.22% 0.12% 0.93% 2.58%
Portfolio 2016 0.25% 2.48% 1.02% 0.24% 0.35% 1.68% 1.74% 8.00%
Benchmark 0.67% 2.03% 0.27% -0.24% -0.20% 1.13% 1.38% 5.13%

Benchmark: 1/2 MSCI All Country World + 1/2 Barclays Gbl Agg
Source: WS Partners, Morningstar


Euro - Growth

Cumulative Performance to endSeptember 2017


Calendar Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
Portfolio 2017 1.24% 2.58% 0.76% 0.29% -0.22% -0.54% 0.21% -0.93% 2.03% 5.50%
Benchmark 0.00% 3.28% 0.29% 0.00% -0.56% -0.81% -0.34% -0.08% 1.45% 3.22%
Portfolio 2016 -0.95% 3.88% 1.55% 0.66% 0.46% 2.35% 1.69% 9.98%
Benchmark 0.31% 2.56% 0.42% -0.26% 0.12% 2.13% 1.83% 7.28%

Benchmark: 2/3 MSCI All Country World + 1/3 Barclays Gbl Agg
Source: WS Partners, Morningstar