MPS on Platform Quarterly Review - April 2026

Q1 returns for the W1M (Waverton) Managed Portfolio Service on Platform ranged from -0.6% to -2.8%. Returns for 2025 ranged from 9.1% to 10.8%.

Equities

The Waverton Strategic Equity Fund was down 2.8% over the first quarter of 2026; investment markets experienced a clear shift in tone, moving from early optimism to pronounced volatility by the end of March. January and much of February were characterised by steady gains in equities, helped by resilient economic data, easing inflation pressures and expectations that interest rates would gradually fall later in the year.

However, this constructive backdrop was abruptly disrupted in late February and March as the escalation of conflict in the Middle East triggered a sharp rise in oil prices and renewed inflation concerns. As a result, global equity markets gave back much of their earlier gains, with overseas and emerging markets particularly weak, while US equities also declined. Year to date, in sterling terms, US equities have continued their underperformance from last year relative to European and Emerging Market stocks.

The portfolio benefited from exposure to oil related stocks (Shell +32%). Higher oil prices also made investors keener on advanced battery makers (CATL +23%). Semiconductor suppliers (Samsung +34%, TSMC +14%) outperformed as the growing demand for chips and ongoing supply chain bottlenecks in memory could translate into near-term revenue and earnings growth. However, investors became increasingly cautious on the “hyperscalers” (Microsoft -22%, Alphabet -6%, Amazon -8%) due to the pace and huge scale of AI capex spending and uncertainty surrounding the path to sustainable returns on these investments.

As we moved into April, sentiment remains volatile as the middle eastern situation clearly remains extremely fragile and some way from resolution. We continue to monitor the situation closely but, at this stage, believe it is prudent to maintain diversification within our equity exposure, with a balance between beneficiaries of a prolonged  conflict in the Gulf (e.g. Shell, CME, Intercontinental Exchange), names that will likely see limited/no impact (e.g. Marsh McLennan, Tencent, AstraZeneca) and those that would be most sensitive to higher oil, gas and related product costs (e.g. Grab Holdings, Unilever) and/or an economic slowdown (e.g. Capital One, Amadeus), which would therefore be expected to rebound quickly in the event of a swift resolution.

Fixed Income

The Waverton Sterling Bond Fund (Class P) provided a return of -1.4% in Q1 2026.

The first quarter of 2026 was dominated by geopolitical developments in March following the Middle East conflict. The favourable fixed income market environment witnessed earlier in the year sharply reversed as markets reacted to the potential ramifications following the energy supply shock. Rates volatility rose sharply and government bond prices fell as markets priced out the potential for rate cuts.

Ultimately most government bond yield curves bear-flattened to reflect potential hawkish policy shifts to combat the inflationary impulse, combined with the longer-term growth drag. Those economies most reliant on imported energy and susceptible to heighted inflation underperformed. Inflation-linked bonds outperformed as breakevens moved higher. Credit spreads widened globally, though remain relatively tight to historical median levels.

The Fund’s conventional government bond allocation detracted from performance as long-end Gilt yields moved higher. This was partially offset by inflation-linked Gilts and US Treasuries which contributed positively to performance. The short position in JGBs also helped temper the impact of the government bond sell-off. The Fund’s credit allocation performed well, despite broad spread widening as spread duration has remained low and carry dominated. Utility names, Energy, and Industrials were the best performers. Local EM supranational debt contributed to performance QTD despite a softer March.

The main positioning traits were maintained over the quarter – namely a barbell approach comprising long duration government bonds and short dated credit. However, some tilts were made to optimise the portfolio including paring back the ultra-long Gilt exposure and overall duration contribution, the addition of local currency EM supranational bonds, the switching of some conventional government bonds to inflation-linked bonds, and the addition of some high-grade state-backed GCC credits. Several new hedges were also added.

The backdrop for fixed income remains constructive, though it is now shaped by heighted geopolitical risks and the corresponding economic responses. In general, market-based policy pricing looks too hawkish against our base case for most central banks to remain on hold, whilst longer dated government bond yields offer attractive levels in the case of a protracted growth drag. Credit spreads have widened modestly but remain tight by historical levels. However, recent volatility has presented select opportunities for spread compression.

Absolute Return

The Waverton Absolute Return Fund returned +0.7% over Q1 2026. The Fund seeks to deliver a positive return on a rolling 12-month basis, irrespective of broader market conditions, and outperformance of UK CPI + 1.5% over a rolling three year period. This will be achieved with a low risk profile relative to equities, limited correlation to broader asset classes and in a cost-effective manner.

The Fund benefited from holdings benefiting from sector rotation towards energy and materials given the impact of the middle eastern conflict on oil and gas prices. Key negative contributors were in the commodity space, which detracted from returns over March, where strategies can be negatively impacted from a rise in commodity volatility or associated sharp rises in prices - but structurally we remain positive on the ability to to extract returns from the commodity market risk premia.

Outlook: In the context of unstable cross-asset correlations and increasing yield curve volatility, the Absolute Return Fund continues to provide  differentiated return streams with low directional beta, reinforcing its role as a diversifier in broader portfolios.

Real Assets

The Waverton Real Assets Fund returned +3.7% over Q1. Commodities and infrastructure were the key contributors to returns over the quarter.

Q1 was a tale of two halves, with the Fund performing strongly through January and February driven by infrastructure and commodities. March saw a sharp sell-off across commodities and listed real assets as escalating Middle East tensions drove a spike in oil prices, reinforcing supply driven inflation concerns and pushing bond yields higher. Gold and other strong YTD performers also corrected as crowded positions were unwound and profits taken, despite the structural bull case remaining intact. We see current levels as an excellent chance to add to holdings and have been doing as such within the Fund.

Positive contributors to performance include US and European utilities and infrastructure names, with Quanta Services (+33%), SSE (+19%) and GE Vernova (+36%). Performance was driven by continued investment in power, grid infrastructure and energy security, alongside increasing recognition of nuclear as a key part of the energy mix. These businesses continue to benefit from strong structural tailwinds, with valuations remaining attractive. Commodity and precious metals exposures also contributed positively: Newmont (+11%), Wheaton Precious Metals (+14%) and Physical Gold (+9%) performed strongly as the gold price remained elevated, reflecting ongoing geopolitical uncertainty and continued central bank demand. Meanwhile our energy exposure in Texas Pacific Land (+68%) and through the G&R Resources Fund (+17%) was strong on a rising oil price and heightened supply risk from the Middle East conflict. Gold saw a sharp correction over March, falling over 15% from the February highs. This felt at odds with gold's usual role as a store of value amongst geopolitical instability.  However, following a strong run of performance the sudden repricing higher in real yields rates, US dollar strength and a rapid unwind of long positions from quantitative and trend following strategies all weighed on performance over March.

Negative contributors were more dispersed and included exposures to the US construction sector remains in recessionary conditions, thus reducing demand for bricks. 3i Infrastructure (-11%) was a negative for performance following the announced write-down of its DNS:NET investment, where a deterioration in financing conditions for German fibre roll-out businesses meant the asset is likely to be marked to zero.

Portfolio activity: The main activity over the quarter was reallocating within our commodity exposures to reflect updated views and some profit taking - specifically reducing our mining and gold holdings in favour of more oil & gas exposure. 

Outlook: Real assets remain supported by powerful structural drivers: government-backed infrastructure programmes, grid modernisation, and the accelerating energy transition.