Jensen-Humphreys sets about 'evolution' of Quilter Cirilium Blend and Generation portfolios
New manager unveils roadmap for expansion
Quilter Investors' Cirilium Blend and Generation multi-asset ranges are set for a change in approach under new portfolio manager Ian Jensen-Humphreys, who joined from Seven Investment Management (7IM) in March.
Jensen-Humphreys was officially made manager of the ranges on 1 June, Investment Week revealed last week, with portfolio management support from Rasmus Soegaard on the Cirilium Blend range and Sacha Chorley on the Generation range.
The former deputy CIO of 7IM said his approach will have more of a focus on managing downside risk, a reassessment of the growth versus value "tilt" of the portfolios, and regional and asset class allocations best suited to a post-Covid-19 world.
With regard to the Cirilium Blend portfolios, which are more focused on growth than the Generation portfolios, Jensen-Humphreys said he expects "a process of evolution, not revolution" with the range in "good shape" at present.
He explained: "I do not expect to see very large turnover, certainly not in the short term.
"The [Cirilium Blend] portfolios are broadly speaking about neutral in terms of strategic asset allocation to equity exposure, which I am comfortable with given the current environment."
However, he said the management team is "looking to focus on some of the regional equity exposures", particularly with regard to building US exposure at the expense of Europe, and "also looking at the growth versus value tilt in the portfolio".
Jensen-Humphreys added there is room to reassess the portfolios' allocation to active managers in certain asset classes where they can be more effective than passive exposure.
He explained: "Some markets are very efficient and it is hard for managers to consistently add value, whereas other regions or asset classes have maybe less information or are less well-researched.
"It is easier in those markets for a good manager with a strong process to deliver returns."
Generation
With regard to the Generation range, which primarily provides income for investors in retirement, Jensen-Humphreys said "managing downside risk and smoothing returns" was of most importance, and he has already introduced a "systematic hedging programme" to the range.
The Generation range is set for slightly higher turnover, according to Jensen-Humphreys, who explained the management team had already reduced exposure to corporate bonds amid the "heavy hands" of central banks, whose asset purchasing programmes have flattened yields.
He said: "I do not see those yields going up materially anytime soon, given the position of central banks. There is a risk investors become too creative when they look for yield.
"I am slightly cautious about that, because we are in a recession and there will be defaults within the high yield space.
"It is unclear right now whether yields are giving you sufficient return to compensate for the likely defaults that will come through."
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