Rebalance changes – 19th May 2020

Please refer to the following tables which show the new list of funds Important Information from KMG Investment Committee

High portfolio

Please note: If you hold funds on any platform other than 7IM or Novia there may be slight fund differences.

Medium-High portfolio

Medium portfolio

Medium-Low portfolio

Medium-High Offshore Bond portfolio

Medium Offshore Bond portfolio

Medium-Low Offshore Bond portfolio

Fund changes to your portfolio  

Our Investment team continue to meet on a bi-weekly basis to review the markets and consider what the impact of ongoing events to COVID-19 will have on the global economy.  Whilst COVID-19 is foremost in all our minds, we must not forget the bigger global picture and issues that remain such as discussions on BREXIT, trade wars etc. 

There is much to consider at this time, and Andrew Heath in our Investment Bulletin last week highlighted some of the key areas we are considering for future growth opportunities.  To this end we are pleased to write to you with specific changes that we have made in the last few days to the portfolio’s strategies.  All changes maintain the risk approach of your portfolio as agreed with your adviser.  What we continue to review is within sectors and the themes that are most likely to deliver returns. 

UK 

In the UK we have added a further fund with the Royal London Sustainable Leaders where we see sustainability in the current climate and into the next few years as an area that will grow as many businesses now change how they operate.  By adding this fund, we have reduced the income producing funds where there will be less return as companies cut dividends for the foreseeable future. 

Europe 

There is a change of fund in the European arena as we simply reduce exposure to smaller companies and move towards those of higher quality in a time when this is important for returns.  We have added the Miton European Opportunities fund. 

Emerging Markets 

There is a change of fund manager to Aubrey Global Emerging Markets adding to high quality companies and those particularly in India and China that are likely to benefit from the economic conditions currently. 

Artificial Intelligence and Health 

We have added a small amount of weighting here with the addition of the L&G Cyber Security fund as more and more work is completed digitally there will be growing demand for safety on line.  In health we have changed fund manager to one who focuses more on advancements in healthcare.  No longer can the need here be ignored! 

For more information on the rationale, then please see Andrew’s more in-depth briefing in our Bulletin. 

All new fund details are enclosed. 

Please bear in mind the changes above may be marginally different depending on your risk profile, the platform that you invest through and the tax wrappers you have.  Full details of the asset allocation changes can be found, on this occasion, on our website as we have needed to send this briefing in the most efficient manner that we can. 

Risk profile 

We have continued to asset allocate your funds so that there is no change in the total exposure to equities so that your risk profile remains unchanged, and we will continue to monitor and manage the volatility of the strategy. 

Tax and fees 

Please remember that these changes will not incur any fees as neither KMG nor the platform charge for switches.  There will be a marginal increase in fund charge on average of 0.01% for low risk through to 0.09% for high risk portfolios. 

Where funds are held outside an ISA, pension or bond, the changes will be subject to capital gains tax.  Where profits are made, we make no apologies for creating taxable gains – no pain no gain!  We never let the tax tail wag the dog.  Any tax will not be payable until January 2022, and as always, we will inform you of gains to include in your tax return in the future. 

We are here to help you if you have any questions. 

Yours sincerely  

The KMG Team