Volatility is here to stay as FE repositions its successful model portfolio service, FE Invest – after a turbulent six months. The head of FE Research, Rob Gleeson underlines the rapid deterioration in market conditions as the catalyst for taking some risk off the table and allocating to broader market strategies, rather than highly focused funds in the current volatile market conditions.

Funds in favour have included the high-performing JOCHM UK Opportunities fund, Lindsell Train UK Equity and the lesser-known HSBC Open Global Property. All these funds avoid heavy sector-specific bets and offer diversified market exposure.

Funds being trimmed at lower risk levels include M&G Global Macro Bond fund, Invesco Perpetual UK Focus fund, Schroder Recovery and JOCHM UK Dynamic, among others.

At higher risk levels the diversifying impact of M&G Global Macro Bond fund makes an addition, even though FE Research has decided to remove it to cut currency risk elsewhere.

Rob Gleeson says: “The instability in the markets has been incredible. We’ve seen huge swings in value on the back of the most inane news – we’ve managed to return decent performance across the range, but the journey has been a wild one.

“The rest of the year looks pretty rough as well. Markets will be jittery over a possible Brexit up to the referendum in June, and then the possibility of a President Trump will likely keep it on the edge right through to November. We don’t see any real growth coming from anywhere, so it makes sense to focus on managing the downside instead.”

READ: The funds that made it, and those that didn't, in the latest FE Approved List