MAB-Quarterly-Review-Q2-2025-Cautious - Flipbook - Page 6
Performance commentary
Market
The second quarter of 2025 provided investors with another timeless reminder of the bene昀椀ts of staying
invested for the long term and checking one’s portfolio valuation as infrequently as possible. The quarter
kicked off with a bout of volatility induced by US President Trump’s announcement of “reciprocal” tariffs in
the now infamous speech on the 2nd April. The magnitude of the tariffs sent global equity markets into a
tailspin, which bottomed on the 8th of that month. Markets staged a remarkable recovery from their nadir in
the latter part of the month. This included a historic surge in the S&P 500 on the 9th of April, which saw the
index of US stocks jump +9.5% in local currency terms, one of its top three days since 1940. This was a pristine
illustration of the necessity of staying invested for the long term and not panicking and selling at the bottom.
An investor who sold on the 8th would have missed one of the best market days in history.
Global equity markets continued to defy a regular cadence of negative headlines to post strong returns
across the board over the quarter. The 昀椀nal week of the month witnessed a new all-time high for global equity
markets as measured by the MSCI All Country World Index in local and US Dollar terms. For Pound-Sterling
based investors, the returns were good (up +5.2%), albeit still below the peak seen in February due to the
strong appreciation of GBP over that period.
Fixed Income markets also had a good quarter. This was supported by an in昀氀ationary environment which
has continued to be benign despite worries about the potential for a tariff-induced resurgence. Increasing
softness in the US and UK labour and housing markets is also likely supporting continued investor interest in
global treasuries at these yield levels. The Eurozone economy also appears increasingly pallid. Lower-quality
high-yield bonds also performed well, supported by relatively high all-in yields, while Emerging Market Local
Currency Debt was one of the stars of the quarter, given continued weakness in the value of the US Dollar vs
other currencies. Our exposure to this asset class returned +8.5% over the quarter and is now up over +14%
for the year to date.
Beyond traditional Fixed Income and Equities, we are mindful of the value added this year by our diversifying
asset classes, and see reasons for this to continue. Our blend of Absolute Return managers is up over +5%
this year (+3% over Q2), more than double the return of UK Cash rates while exhibiting zero sensitivity to the
equity market. Our Real Assets blend, containing more in昀氀ation-sensitive strategies, is up +7% this year (+1%
for Q2), even under conditions whereby in昀氀ation has continued to be tame.
As ever, there is a world of opportunity out there for investors who are suf昀椀ciently diversi昀椀ed and long-termoriented enough to capitalise on them.
Total fund
The Multi-Asset Blend Cautious Fund (“the Fund”) rose +2.8% over the second quarter,
comfortably outperforming the +2.2% return of its IA Mixed Investment 0-35% Shares
performance comparator. Since the Fund’s inception on 17th October 2022, the Fund has
generated a cumulative return of +19.0%.
Pg 5
