MPS October 2025 rebalance update

We rebalanced the portfolios on 16th October.

Stocks have performed well in recent months. The current economic and policy outlooks look good – the US Central Bank is cutting interest rates at the same time, growth remains decent and earnings are growing strongly. However much of the rise in stocks has been a result of valuations increasing and markets are discounting an optimistic outcome. While we expect the backdrop to remain favourable for stocks, we recognise there is more risk of a correction we think than before and we’re taking advantage of the good performance and rebalancing portfolios to model weight as well as slightly reducing the allocation to US stocks.

How we’re positioned in the portfolios

Overall we continue to have a preference for equities spread across the US, Europe and Asia. Consumer spending in the US remains good albeit increasingly driven by higher earners. The rise in stock markets of late will probably support spending amongst this group. We are also paying close attention to valuations here given how far equity markets have moved since the trough in April and our focus on managing the concentration of mega-cap stocks which we think is a risk to markets remains even more important.

While a lot of political headlines have emerged from Europe, we still think equities can move higher in the region: rising economic growth, ongoing government spending and a central bank that has been cutting interest rates over the past year should be supportive for markets. In Asia, equity markets can benefit from solid global economic growth and more trade if tariffs stay low.

Past performance is not a reliable indicator of future performance. The value of an investment can go down as well as up and your client may get back less than they’ve paid in.