MAB Quarterly Review Q1 2025 - Growth - Flipbook - Page 4
Performance commentary
Market
Global equity markets collectively fell over the quarter, with the MSCI All Country World Index of global equities
down -4.2% in GBP terms. High-quality global bonds provided some welcome respite with the Bloomberg
Global Aggregate Index up +1.2% over the quarter in Sterling hedged terms, with long-dated US Treasury
bonds among the best performers.
Despite the prevailing conventional wisdom coming into the year of continued US equity market dominance,
the outcome so far has been precisely the opposite with the US equity market and the US Dollar feeling the
brunt of the market’s ire against a backdrop of continued economic uncertainty and ongoing speculation
about the future breadth and magnitude of President Trump’s programme of tariffs. The S&P 500 Index of
US equities fell -7.1% over the quarter in Sterling terms with the “Magni昀椀cent 7” dominated Nasdaq 100
Index dropping -10.8% as concerns grew that previously lofty expectations about future spend on Arti昀椀cial
Intelligence infrastructure may well have been too optimistic.
However, the US’s loss was seemingly at other regions’ gain as global investors sought to diversify their equity
allocation to other cheaper equity markets with differing underlying risks and exposures. Continental European
equity markets were particularly robust, with the MSCI Europe ex-UK Index up +7.6% in Sterling terms over
the quarter as investors reacted favourably to renewed hopes of a cease昀椀re in Ukraine. The election of a new
German Chancellor, Friedrich Merz, also brought with it the creation of a new €500 billion infrastructure fund,
as well as a groundbreaking loosening of 昀椀scal policy to aid German rearmament. European banks performed
particularly well as did the large European defence companies like Rheinmetall in Germany which more than
doubled in price over the quarter.
The UK equity market also enjoyed a positive quarter with the FTSE All-Share Index up +4.5%, although the
underlying sector returns were highly divergent with large Banks, Insurance companies, Pharmaceutical and
Defence sector companies enjoying a very strong quarter but more domestic oriented and construction
companies in negative territory. The FTSE 250 Index of mid-sized companies was down -5.0% over the quarter,
more than 11% behind the +6.1% return of the large-cap FTSE 100 Index.
China was the standout market in the 昀椀rst quarter with the MSCI China Index rising +11.6% in Sterling terms.
Despite President Trump’s ongoing threat of even greater tariffs, investors focused more on the marked
change in policy direction from the Chinese authorities, with a raft of new initiatives to support large Chinese
private enterprises as well as to encourage the cash-rich Chinese consumer to start spending again. Excitement
about the implications of recent high-pro昀椀le Chinese technological innovation within the area of Arti昀椀cial
Intelligence continued to support the broader Chinese technology sector. Meetings between President Xi
Jinping and senior business leaders also suggested a more pro-business environment. Unfortunately, China’s
strong quarter was not enough to push the MSCI Emerging Markets Index (-0.1%) into positive territory
though, as other large markets like India (MSCI India -5.8%) and Taiwan (MSCI Taiwan -15.2%) fared less well
in the uncertain economic environment.
Total fund
The Multi-Asset Blend Growth Fund (“the Fund”) was down -0.6% over the 昀椀rst quarter, outperforming the
-1.2% return of its IA Mixed Investment 40-85% Shares performance comparator. Since the Fund’s inception
on 22nd July 2019, the Fund has generated a cumulative return of +36.0%, approximately 10% ahead of its
IA sector comparator.
Equities
Our Tactical Asset Allocation positioning in equities was marginally negative for the quarter, with the negative
impact from our underweight to the rallying European ex-UK equity market partially offset by the positive
impact from our ongoing modest overweight to UK equity market.
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