Market review

Stock markets were driven by shifting sentiment during the quarter, as investors reacted to political, economic and company news. Concerns around trade policy and the dominance of a small number of giant technology companies weighed on confidence at times. However, looking past the headlines, the global economy remained relatively stable, inflation eased further and company earnings generally held up well.

Portfolio positioning

We made selective changes across our MPS portfolios during the quarter. In equities (company shares), we reduced exposure to the US technology giants, because we expect stronger performance in less highly valued areas of the market. We also reduced our holdings in UK equities, believing that, after a strong run, valuations no longer looked attractive as previously. We modestly increased exposure to Japanese equities, where valuations remain appealing, and added to government bonds* – on the basis of the income available and their potential to benefit from further interest rate cuts.

Investment outlook

Uncertainty around government debt and trade policy is likely to continue to cause market volatility in the months ahead. However, we believe falling inflation, resilient economic growth and the prospect of further interest rate cuts should provide a supportive environment for diversified portfolios. After a period of dominance by the US tech giants, we see opportunities across a broader range of companies and markets, even if headlines remain unsettling.

*Bonds are financial instruments used by governments to borrow money from investors.

We have provided quarterly commentaries for our three MPS portfolio options: active, blended and passive.

You can read the reports using the links below:

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.