Simon Doherty

Ongoing policy uncertainty and downward revisions to this year’s earnings growth expectations prompt a note of caution in chasing the recent rally. Indeed, we anticipate markets to remain volatile, and with equities trading at above average valuations, they remain more prone to corrections around risk events.

Having reduced headline equity exposure in May, our MPS strategies are neutrally weighted to risk assets as we enter the second half of 2025. At the regional level we have also trimmed the allocation to US equities, adding to European stocks where we see specific opportunities. Elsewhere, the allocation to hedge funds was increased during the second quarter, providing appealing diversification benefits in the current environment. We have also added to the strategies’ exposure to the UK real estate investment trust (REITs) sector, with this unloved segment of the market trading at an attractive discount while offering a combination of income and, more recently, capital value growth.

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