MPS Portfolio changes

This is for UK advisers - feel free to copy the text and share with your clients.

This isn't a recommendation or advice, it is for information only. If you have any questions please speak to your Financial Adviser.

We rebalanced the model portfolios on 16th April.

President Trump bent to market pressure last week and paused most “reciprocal” tariffs (excluding China) for 90 days. Despite the pause, tariffs seem to be an ideological battle for the U.S. Administration, suggesting the trade war is far from over.

Recent data is showing that the ‘America First’ policies are hurting American’s confidence in the economic outlook. This means the US economy is expected to grow at a slower rate in 2025 because households and businesses are in a ‘wait and see’ mindset rather than spending and investing.

• We have reduced our allocation to higher risk bonds which are more sensitive to economic weakness and added to US and UK government bonds which are less risky. Government bond prices typically rise when economic growth slows or becomes more uncertain.
• Fortunately we started the year in a place of decent global growth and strong company profits which has not disappeared with tariffs. We think there remains good opportunities within shares. We continue to hold more in shares spread across Europe, Japan and Asia.

We think the key factors for investors to keep in mind right now are:

1. Not to underestimate the power of how regions will respond to US policies. Other key economic regions - Europe and Asia - will be more willing now to use spending and tax cuts to support domestic industries and consumers. The market impact of counter-stimulus can create new investment opportunities.
2. Having an ‘active’ approach to asset allocation will help manage what we see as a more uncertain time for US shares. We think the best approach is to invest across different regions alongside the US to take advantage of emerging opportunities as the policy backdrop changes.
3. Having exposure to other assets can provide good diversification to just ‘global’ shares and bonds. Investing in the shares of infrastructure and property companies that own toll roads, airports and electricity networks provide additional diversification and reduce risk.
4. “Time in not timing”. It’s an old adage but research shows that those who stay invested over the medium to long-term in a well diversified portfolio will generally perform better that those who try to time the market, cashing out to avoid short term fluctuations. We understand the current situation can cause uncertainty so always recommend you seek professional financial advice before taking any decisions.

For more information about our portfolios, please contact you Financial Adviser.

The value of your investment can go down as well as up so you might not get back the amount you put in.