Asset Class |
RMA1 |
RMA2 |
RMA3 |
RMA4 |
RMA5 |
|---|---|---|---|---|---|
Equity |
14.01% (+1.75%) |
25.03% (+1.55%) |
37.03%(+1.30%) | 48.00% |
60.00% (+2.40%) |
UK |
4.13% (+0.54%) |
7.38% (+0.50%) |
10.92% (+0.45%) |
14.16% (+0.55%) |
17.70% (+0.82%) |
Europe |
1.89% (+0.36%)
|
3.38% (+0.44%) |
5.00% (+0.53%) |
6.48% (+0.67%) |
8.10% (+0.90%) |
North America |
2.35% (+0.08%) |
4.19% (-0.15%) |
6.20% (-0.41%) |
8.04% (-0.55%) |
10.05% (-0.61%) |
Japan |
1.05% (+0.13%) |
1.88% (+0.12%) |
2.78% (+0.10%) |
3.60% (+0.12%) |
4.50% (+0.18%) |
Asia |
2.10% (+0.26%) |
3.75% (+0.23%) |
5.55% (+0.20%) |
7.20% (+0.23%) |
9.00% (+0.36%) |
China |
0.67% (+0.11%) |
1.19% (+0.13%) |
1.76% (+0.15%) |
2.28% (+0.19%) |
2.85% (+0.26%) |
India |
0.49% (+0.09%) |
0.88% (+0.10%) |
1.30% (+0.12%) |
1.68% (+0.15%) |
2.10% (+0.20%) |
Emerging Markets |
0.63% (+0.09%) |
1.13% (+0.09%) |
1.67% (+0.09%) |
2.16% (+0.12%) |
2.70% (+0.17%) |
Middle East and Africa |
0.70% (+0.09%) |
1.25% (+0.08%) |
1.85% (+0.06%) |
2.40% (+0.08%) |
3.00% (+0.12%) |
Alternatives |
3.05% |
3.60% |
4.15% |
5.10% |
6.05% |
Infrastructure |
1.83% (-0.53%) |
2.16% (-0.61%) |
2.49% (-0.70%) |
3.06% (-0.84%) |
3.63% (-0.98%) |
Private Equity |
0.61% (-0.08%) |
0.72% (-0.11%) |
0.83% (-0.13%) |
1.02% (-0.18%) |
1.21% (-0.23%) |
Commodities |
0.61% (+0.61%) |
0.72% (+0.72%) |
0.83% (+0.83%) |
1.02% (+1.02%) |
1.21% (+1.21%) |
Other Strategies |
0.60% |
0.70% |
0.80% |
1.00% |
1.20% |
Other Factors |
0.24% (/)
|
0.28% (/) |
0.32% (/) |
0.40% (/) |
0.48% (/) |
Tactical Asset Allocation |
0.36% (/) |
0.42% (/) |
0.48% (/) |
0.60% (/) |
0.72% (/) |
Real Estate |
4.60%
|
5.95% |
6.80% |
7.65% |
9.00% |
UK |
2.76% (/) |
3.57% (/) |
4.08% (/) |
4.59% (/) |
5.40% (/) |
Europe |
0.69% (/) |
0.89% (/) |
1.02% (/) |
1.15% (/) |
1.35% (/) |
Asia |
1.15% (/) |
1.49% (/) |
1.70% (/) |
1.91% (/) |
2.25% (/) |
Fixed Income |
73.53% (-1.75%) |
61.46% (-1.55%) |
48.82% (-1.30%) |
36.51% (-1.55%) |
22.72% (-2.40%) |
UK Investment Grade |
23.52% (-1.12%) |
19.07% (-0.32%) |
14.63% (+0.11%) |
10.59% (+0.12%) |
6.37% (-0.29%) |
EU Investment Grade |
6.62% (+0.97%) |
5.23% (+0.66%) |
3.90% (+0.40%) |
2.74% (+0.26%) |
1.59% (+0.15%) |
US Investment Grade |
12.13% (-0.48%) |
9.84% (-0.56%) |
7.56% (-0.45%) |
5.48% (-0.52%) |
3.30% (-0.66%) |
UK Government |
4.41% (-0.11%) |
3.69% (-0.09%) |
2.93% (-0.08%) |
2.19% (-0.09%) |
1.37% (-0.14%) |
US Government |
4.04% (-0.47%) |
3.38% (-0.40%) |
2.68% (-0.32%) |
2.01% (-0.28%) |
1.25% (-0.26%) |
Asia |
14.33% (+0.04%) |
11.99% (+0.01%) |
9.51% (/) |
7.12% (-0.11%) |
4.44% (-0.34%) |
China |
0.74% (+0.74%) |
0.62% (+0.62%) |
0.49% (+0.49%) |
0.37% (+0.37%) |
0.23% (+0.23%) |
Convertibles |
1.84% (-0.04%) |
1.54% (-0.04%) |
1.22% (-0.03%) |
0.91% (-0.04%) |
0.57% (-0.06%) |
Global High Yield |
1.50% (-1.16%) |
1.50% (-1.62%) |
1.50% (-1.79%) |
1.30% (-1.67%) |
0.90% (-1.23%) |
Emerging Market Debt |
4.40% (-0.11%) |
4.60% (+0.20%) |
4.40% (+0.38%) |
3.80% (+0.41%) |
2.70% (+0.22%) |
Cash |
4.25% |
3.25% |
2.50% |
1.75% |
1.00% |
Investment Insights
2025 Waystone Risk Managed Active and Risk Managed Passive Funds Strategic Asset Allocation Review
Last Updated: 30 Jul 25 15 min read
An update from the M&G Treasury & Investment Office (T&IO) detailing the recent Strategic Asset Allocation (SAA) changes that have been implemented across the Waystone Risk Managed Active and Risk Managed Passive fund ranges.
The Long-Term Investment Strategy team within T&IO are responsible for carrying out the SAA reviews for all of our multi-asset funds. Key to this are their own capital market assumptions for the expected returns, volatilities and correlations for all of the underlying asset classes.
Key changes
As part of the annual review process, we evaluated the Strategic Asset Allocation (SAA) positions to ensure the fund ranges remain well aligned with current market conditions and customers attitude to risk expectations.
A key addition to the portfolios is commodities, initially via the iShares Commodities ETF, to provide diversification benefits. From an investment risk perspective, we have reduced risk at the lower end of the Passive range (RMP1 & RMP2) to better align with the Active range.
Another key change within the portfolios has been an increase in equity exposure across most regions such as the UK, Europe and Asia. This has been funded by a reduction in US equities and across Fixed Income. Notably we have meaningfully decreased exposure within the Global High Yield segment within Fixed Income.
Real Assets such as Real Estate and Alternatives remain a key portfolio diversifier due to their low correlation to a basket of purely equities and bonds.
Equities
- Increased overall equity exposure across all funds except Risk Managed Passive 1 and 2.
- Small shift in allocation from US to European equities to reflect the improved relative prospects between the two geographical areas in the current conditions.
- The allocation to Indian equities was first introduced in November 2021. Now that this exposure has been fully integrated into the funds, we are in a position to increase it further, to reach the optimal level within our portfolios.
Fixed Income
- A slight reduction has been made to the US Fixed Income allocation to support an increased exposure to European Fixed Income, which currently offers a more compelling investment opportunity.
- In addition, we have implemented a meaningful decrease in our Global High Yield allocations in response to persistently compressed risk premiums. The proceeds have been used to diversify our Asia Fixed Income exposure by introducing China Onshore Bonds, enhancing geographic diversification.
Real Estate, Alternatives and Other Strategies
- We have further diversified our alternatives allocation by introducing Commodities, which are expected to play a key role in enhancing portfolio resilience amid a de-globalising market landscape.
- Our commitment remains focused on broadening the asset mix to include investments with tangible cash flows - providing effective diversification, particularly in inflationary environments.
- We are building positions in strategies that exhibit low correlation to the economic cycle, such as volatility arbitrage, cross-asset class momentum and royalty based investments. These offer differentiated sources of return to the rest of the portfolio.
Asset Allocations
The headings below show the new allocations by asset class for the Risk Managed Active and Passive funds from 01 June 2025.
Asset Class |
RMP1 |
RMP2 |
RMP3 |
RMP4 |
RMP5 |
|---|---|---|---|---|---|
Equity |
15.84% (-1.65%) |
26.92% (-0.75%) |
38.94% |
50.39% (+0.15%) |
62.85% (+0.65%) |
UK |
4.68% (-0.44%)
|
7.94% (-0.15%) |
11.49% (+0.14%) |
14.87% (+0.17%) |
18.54% (+0.35%) |
Europe |
2.14% (/)
|
3.63% (+0.24%) |
5.26% (+0.51%) |
6.80% (+0.65%) |
8.48% (+0.87%) |
North America |
2.65% (-0.67%) |
4.51% (-0.75%) |
6.52% (-0.85%) |
8.44% (-1.11%) |
10.53% (-1.29%) |
Japan |
1.19% (-0.18%)
|
2.02% (-0.14%) |
2.92% (-0.11%) |
3.78% (-0.14%) |
4.71% (-0.14%) |
Asia |
2.38% (-0.21%)
|
4.04% (-0.06%) |
5.84% (+0.10%) |
7.56% (+0.12%) |
9.43% (+0.22%) |
China |
0.75% (/) |
1.28% (+0.09%) |
1.85% (+0.18%) |
2.39% (+0.23%) |
2.99% (+0.31%) |
India |
0.55% (-0.02%) |
0.94% (+0.03%) |
1.36% (+0.08%) |
1.76% (+0.11%) |
2.20% (+0.15%) |
Emerging Markets |
0.71% (-0.06%)
|
1.21% (-0.01%) |
1.75% (+0.05%) |
2.27% (+0.06%) |
2.83% (+0.09%) |
Middle East and Africa |
0.79% (-0.07%) |
1.35% (-0.01%) |
1.95% (+0.05%) |
2.52% (+0.06%) |
3.14% (+0.09%) |
Alternatives |
1.20%
|
1.70%
|
2.20%
|
2.70%
|
3.20%
|
Infrastructure |
0.96% (-0.24%)
|
1.36% (-0.34%)
|
1.76% (-0.44%)
|
2.16% (-0.54%)
|
2.56% (-0.64%) |
Commodities |
0.24% (+0.24%) |
0.34% (+0.34%) |
0.44% (+0.44%) |
0.54% (+0.54%) |
0.64% (+0.64%) |
Real Estate |
1.50%
|
2.20%
|
2.90%
|
3.35%
|
3.80% |
UK |
0.90% (/)
|
1.32% (/) |
1.74% (/) |
2.01% (/) |
2.28% (/) |
Europe |
0.60% (/)
|
0.88% (/) |
1.16% (/)
|
1.34% (/) |
1.52% (/) |
Fixed Income |
77.15% (+1.65%) |
65.96% (+0.75%) |
53.44% (-0.15%) |
41.82% (-0.15%) |
29.15% (-0.65%) |
UK Investment Grade |
28.95% (-0.51%) |
24.90% (-0.04%) |
20.31% (+0.21%) |
15.78% (+0.68%) |
10.06% (-0.22%) |
EU Investment Grade |
11.54% (+1.76%) |
8.90% (+0.75%) |
6.95% (+0.52%) |
5.23% (+0.40%) |
4.08% (+0.80%) |
US Investment Grade |
15.44% (-0.43%) |
13.35% (-0.17%) |
10.42% (-0.57%) |
7.84% (-0.66%) |
5.25% (-0.71%) |
UK Government |
5.02% (+0.11%) |
4.29% (+0.05%) |
3.47% (-0.01%) |
2.72% (-0.01%) |
1.89% (-0.04%) |
US Government |
4.63% (-0.28%) |
3.96% (-0.28%) |
3.21% (-0.28%) |
2.51% (-0.22%) |
1.75% (-0.19%) |
Asia |
6.56% (+1.27%) |
5.61% (+1.04%) |
4.54% (+0.79%) |
3.55% (+0.62%) |
2.48% (+0.39%) |
China |
0.77% (+0.77%) |
0.66% (+0.66%) |
0.53% (+0.53%) |
0.42% (+0.42%) |
0.29% (+0.29%) |
Global High Yield |
0.77% (-0.74%)
|
0.99% (-0.97%) |
1.07% (-1.08%) |
1.05% (-1.05%) |
0.87% (-0.91%) |
Emerging Market Debt |
3.47% (-0.30%) |
3.30% (-0.29%) |
2.94% (-0.28%) |
2.72% (-0.32%) |
2.48% (-0.06%) |
Cash |
4.25% |
3.25% |
2.50% |
1.75% |
1.00% |
Source: T&IO as at 01.06.2025 – please note not all figures may tally to 100% due to the effects of rounding.
Outlook
We have entered a new and increasingly uncertain economic regime, characterised by shorter and more volatile cycles. In this environment, the importance of robust diversification across asset classes and regions is heightened.
The global economic environment has shown resilience; however escalating geopolitical tensions and persistent trade uncertainties may begin to weigh on market sentiment. Recent developments between Iran and Israel have elevated risk levels, while delays in implementing tariffs at the scale initially proposed, have provided only temporary relief. We anticipate that markets will remain highly responsive to further geopolitical and policy shifts.
Although private markets have encountered headwinds in recent years, we see meaningful reasons for optimism as the base effects that have helped drive inflation lower over the past year begin to fade.
While fixed income and equities can continue to act as diversifying components within portfolios, the ongoing threat of inflation and elevated financial risks reinforce the appeal of real assets. We maintain our commitment to a broad and balanced mix of asset classes that generate tangible cash flows, offering genuine diversification and low correlation to the economic cycle – especially in inflationary regimes.