MPS April 2026 rebalance update

We rebalanced the Passive, Hybrid and Global ESG Themes portfolios on the 15th of April 2026. We have detailed the changes we have made to the portfolios below along with the rationale. 

Asset Allocation

We have slightly increased equities and made a corresponding reduction in bonds. We have taken the opportunity to add to equities following the recent market sell‑off driven by the conflict in Iran. We believe underlying company fundamentals remain supportive and corporate earnings have continued to prove resilient.

While we recognise that some regions may be relatively better insulated from a prolonged period of market volatility driven by higher oil prices and inflationary pressures, we continue to place a strong emphasis on regional and thematic diversification across portfolios.

Fund selection

In the Hybrid models, we have made the following changes:

US fixed income: We have completed a review of the US fixed income allocation. To align more closely with our long‑term asset allocation to US investment grade and US government bonds, we have increased exposure to the PIMCO US Investment Grade Corporate Bond and PIMCO US Total Return funds, funded by reductions to the Vanguard US Government and Vanguard US Investment Grade funds. We believe the active management approach of the PIMCO funds provides greater flexibility and the potential to add value over time across varying market conditions.

Emerging market equities: We have removed the Franklin India fund and, on average, increased allocations to the Goldman Sachs Emerging Markets and Lazard Emerging Markets funds. In a more volatile investment environment, we believe managers with the flexibility to actively adjust country and sector exposures within emerging markets are better positioned to add value, noting that both Emerging Market funds have exposure to Indian equities.

US equities: We have removed the Natixis Loomis Sayles US Equity Leaders fund and increased allocations to passive US equity funds. This change helps reduce overall costs within the higher‑risk portfolios. We have chosen the US market as the area to reduce active exposure, reflecting the increased challenge of consistently outperforming broad US equity markets over the long term.

UK equities: We have removed the Liontrust UK Sustainable Future Growth fund and reallocated the proceeds to passive UK equity funds. The Liontrust fund has a mid‑cap bias, which we have decided to reduce in order to maintain a more balanced market capitalisation exposure across UK equities.

Should you have any questions on this, or for an update session do reach out to your dedicated BDM.