• SJP has reduced investment grade corporate bond allocations in favour of conventional and inflation-linked government bonds, UK equities and small cap equities. These changes vary across the Polaris, Polaris Multi-Index and InRetirement ranges.
  • Scaled back its overweight allocation to emerging market equities across the Polaris Multi-Index funds, in response to increased concentration risk.

 

St. James’s Place (SJP) has implemented a series of portfolio adjustments across its Polaris, Polaris Multi-Index and InRetirement fund ranges, reflecting continued focus on diversification, portfolio resilience and long-term growth.

The changes form part of SJP’s regular portfolio review process and are not a response to specific market events.

Reduction in investment grade corporate bond allocations

SJP has reduced investment-grade corporate bond allocations by over £2 billion across its fund ranges. The move reflects narrower valuation opportunities relative to government bonds, and increased overlap with technology companies already prominent in global equity markets following a period of heavy corporate bond issuance.

Against this backdrop, SJP has increased allocations to government bonds to strengthen diversification, while adding to selected areas of equity markets with attractive and differentiated long-term return potential. Changes include:

  • Government bonds: Increased allocations to global government bonds, including inflation-linked bonds, across all fund ranges to strengthen portfolio resilience and diversification.
  • UK equities: Increased allocations to UK equities within the Polaris Multi-Index and InRetirement ranges, reflecting attractive valuations relative to many global markets and the benefits of exposure to a different mix of companies and sectors.
  • Small-cap equities: Increased allocations to smaller companies across the Polaris range, which offer attractive valuations relative to larger companies and provide exposure to a broader range of businesses and economic drivers.

 

Reduced emerging market exposure within Polaris Multi-Index
While emerging market positions remain overweight across all ranges, SJP has reduced a portion of its index-oriented emerging market exposure within Polaris Multi-Index by c.£70 million and reallocated this to small-cap equities.

This move also reflects growing concentration within major emerging market indices, as large technology companies now account for an increasing share of the market. This has reduced some of the diversification benefits traditionally associated with the asset class.

Commenting on the changes, Robin Ellis, Director of Multi-Asset Portfolio Management at St. James’s Place, said: “We’re operating in a market where performance has become increasingly dependent on certain areas. Diversification matters most when markets become convinced it doesn't.

As concentration has increased across both equity and bond markets, we've broadened our sources of return to help portfolios remain resilient, adaptable and positioned for long-term growth. This should leave portfolios better placed to navigate changing market conditions and capture the best opportunities for our clients."