Asset Allocator sifted through Quilter Wealthselect’s latest rebalance note this morning and a couple of changes have caught the eye.
One of which is the team’s decision to initiate a holding in the newly-established Redwheel Life Changing Treatments fund across their sustainable range.
The fund itself is a relative newbie, having launched in October 2023. At the end of April, it had AUM of just $700,000, indicating that WealthSelect has taken a significant stake in the mandate as it begins to gather inflows.
We touched base with the team to get inside their rationale, and they told us the fund will help diversify their healthcare theme alongside their existing Candriam Oncology Impact holding.
“It is a new strategy and a new process pioneered by the portfolio manager, however he has experience running healthcare funds so is acutely aware of the biases, the risks involved and has managed portfolios which have had sizable AUM of over £500mn,” said Bethan Dixon, one of WealthSelect’s three portfolio managers.
Stuart Clark added that there’s potential for greater alpha to be found in early-stage products, commensurate with the higher risk taken on. But he said the team is always keen to ensure that any alpha generated doesn’t come purely from smaller-caps or high turnover, which may lose their sparkle if the fund successfully grows its asset base.
“We also want to ensure that the processes and resources available to the manager are robust and therefore an established business partnership with a firm like Redwheel allows us to understand the environment the portfolio manager is operating within,” he added.
Alongside this, they also added AllianceBernstein Global Sustainable Equity to the sustainable range after searching for a manager to complement their global multi-thematic allocation – and as a way of positioning portfolios more defensively.
“The sustainable fund environment continues to evolve and as such new and interesting funds are coming to market that we are interested in,” added Dixon.
“We are very conscious of ensuring we have appropriate diversification in the sustainable range given the tendency for structural biases, so we are excited by the addition of two new funds helping to increase optionality within the manager mix.”
