North Investment Partners co-founder John Husselbee is reviewing the income exposure in his multi-asset and discretionary model portfolios to position them for a “lower for longer” interest rate environment.
Husselbee, who co-founded the firm in 2005 and oversaw its acquisition last year by Liontrust Asset Management, started to examine his income positions in response to the Bank of England’s pledge that interest rates are unlikely to rise in the near future.
He says: “We think rates will stay lower for longer after forward guidance was brought in. We do not really see how bond and cash yields are going to rise that qui-ckly so are looking for a bit more income from equities. We are looking at our portfolios to see how we can win a bit more income without taking on additional risk.”
Although no changes have yet been made to portfolio allocation, Husselbee is considering putting money into enhanced income funds to access a higher yield. He is currently examining managers to see how they are positioned.
Hargreaves Lansdown senior investment manager Adrian Lowcock agrees now seems to be an appropriate time for investors to take another look at their income exposure.
He says: “There is not a great return on fixed income at the moment, even though it is better than it was. But equity income looks to be quite an attractive option when you have inflation below 2 per cent, companies’ earnings growth coming through and the economy recovering.”
Liontrust acquired North Investment Partners in October as part of a move into the multi-asset market.