For the next Adviser Fund Index rebalancing on November 1, 2006, panellists are concentrating on both risk levels and individual fund performance.Ben Willis, investment manager and head of research at Whitechurch Securities, has made a number of fund changes in his AFI portfolios, each relating to risk. In the cautious portfolio, Willis is moving into the Lazard UK alpha fund because he wants to be more defensive. He says: “We have a fair exposure to some distribution funds. We’ve cut back on the Jupiter distribution and Gartmore cautious managed funds and moved it into Lazard. We are looking at defensive markets in light of any global slowdown.” Willis says that over the next six months, large caps will outperform and provide better value and better returns. “They will provide better value than UK small and mid caps,” he says. Again, in an attempt to reduce risk, Willis is removing the SG American growth fund and is replacing it with UBS American equity. He is doing this because he wants to have more of a “core holding, lower down on the risk scale”. Whitechurch is also moving the New Star European growth fund from its balanced into its aggressive portfolio recommendations. It is adding the Artemis European growth fund to its balanced portfolio and removing the Fidelity European opportunities fund from the aggressive AFI. The group sold out of Fid-elity European opportunities because it wanted to move into a less risky European fund after the market correction, says Willis. “Because of the market correction and our belief that the global and European economies are set to slow, we decided to move into a less risky fund, with a greater bias towards mid and large-caps,” he explains. Brian Dennehy, managing director at Dennehy Weller & Co, says the weightings in terms of risk remain the same across his portfolios. Dennehy is changing his holdings for different reasons. In the higher-risk spectrum, he is switching from the Schroder Tokyo fund to the Jupiter Japan income fund. In the medium risk part of the portfolios, he says he continues to like the Jupiter income fund but is moving some money out to the Newton higher-income fund in the balanced and aggressive portfolios. In the lower risk portion of the portfolios, Dennehy will will retain the current split and fund choices. He is doing this both for diversification purposes and because of the threat of an economic slowdown.