MPS on Platform Quarterly Review - January 2026

Q4 returns for the W1M (Waverton) Managed Portfolio Service on Platform ranged from 2.7% to 2.9%. Returns for 2025 ranged from 9.1% to 10.8%.

Equities

Global equity returns were volatile but positive last year and ended around highs. After the sharp sell-offs in the Spring last year, equities recovered sharply and returns broadened out across the whole market rather than just being concentrated in the Technology sector which has been so dominant. Positive sentiment was driven by better than expected global growth, particularly in the US where the consumer showed some resilience. Earnings forecasts were underpinned by central bank rate cuts over the year (Japan being the exception) and optimism around the potential for AI.

The portfolio benefited from Alphabet, the parent company of Google, rising by +29% in the 4th quarter as it continued to cement its position as one of the global AI leaders throughout the year; this is important in terms of protecting its dominant position in search. Thermo Fisher, the life science equipment and services company, also performed well as did the semiconductor company AMD. In contrast, Microsoft underperformed due to greater scrutiny surrounding the future financial viability of OpenAI, a key customer of Microsoft.

Looking ahead, we expect a further broadening out of market performance beyond the mega-cap tech stocks, and the “Magnificent Seven”, following an extended period of high levels of concentration in markets (seven stocks account for around a third of the S&P500’s market capitalisation). This shift is likely to be supported by falling interest rates, easing borrowing costs, an ongoing resilient high-end consumer, and more attractive relative valuations across a wider range of sectors.

Fixed Income

Waverton Sterling Bond Fund (Class P) provided a return of +2.6% in Q4

Following a post-pandemic inflation spike, bond yields globally have firmly moved into more normal  historical ranges after a long period of “zero interest rates” and quantitative easing policies around the world.

As inflation has moderated from peak levels, US and UK government bonds have seen yields begin to subside. Markets expect one or two small rate cuts in the next 12 months, leaving both heading to around 3% by the end of the year. This however indicates that inflation risks remain; this may be preferable to lower interest rate expectations if that were to be caused by recession.

Government bond yields were pushed slightly higher into the end of last year as signs of an easing US labour market slowdown and improving economic momentum emerged. Mixed signals from central banks on the timing and pace of future rate cuts added to volatility, but rate cuts in the US and UK are still expected.

In Japan, yields continued to climb following a fiscally expansive budget from Prime Minister Takaichi, while the Bank of Japan reaffirmed its commitment to further rate hikes as inflation remained above target. UK gilts outperformed other rates markets, remaining steady over the month, with investors reassured by recent inflation data but cautious about political risk heading into 2026. Post-budget, the gilt market can refocus on inflation, economic activity, and labour market trends – all pointing toward lower rates. Long-dated gilts are supported by the UK DMO’s decision to reduce issuance and cancel upcoming auctions, offset by increased T-Bill supply.

Absolute Return

The Waverton Absolute Return Fund ended last year positively, cementing a full year returns of 6.3% over 2025, outperforming its benchmark significantly.

Over the year, the aggregate exposure to specialist fixed income, absolute return strategies and structured opportunities all contributed positively to returns.

While we continue to construct the overall portfolio to ensure upside capture in conjunction to downside protection, in risk adjusted terms, the fund continues to perform strongly. Promisingly, our ongoing efforts to increase the return attributes of the fund have proved positive with improved returns as well as low volatility.

Real Assets

The Waverton Real Assets Fund has a strong end to 2025 and rose +22.7% over calendar year.

Each of our top major contributors to returns came from either one of these exposures. Newmont, a US listed gold miner, was our top contributor rising +152.8% over the year; we also hold physical gold which did well (+53.5%).  

GE Vernova, a global energy company, focused on electrification and decarbonizing energy through its power (gas turbines, steam), wind (turbines, services), and grid solutions (transmission, distribution) divisions, was up over 85%.

Given a positive view on certain industrial metals proved beneficial with Valterra  Platinum rising strongly from purchase (+54.3%). Valterra is the world's leading primary producer of Platinum Group Metals (PGMs) like platinum, palladium, rhodium, etc., mining, refining, and trading them globally, alongside co-products like nickel, copper, and gold, serving essential roles in jewelry, autocatalysts, fuel cells, and electronics.

Other strong performers included holdings, such as Iberdrola, a global energy leader, focused on clean energy, smart grids, and large-scale storage,  SSE, a major UK energy company focused on renewables, networks, and flexible power firm and Vinci, a French multinational company and world leader in energy, and construction, building and operating infrastructure like motorways and airports globally. We continue to believe these holdings offer excellent long-term potential, underappreciated by investors.

Looking ahead, we see a very attractive opportunity set for real asset companies and industries. A trifecta of undervalued investment companies and REITS, power, grid and decarbonisation opportunities across infrastructure, coupled with a broadening bull market in resources, including precious metals, provides an extremely compelling long term opportunity set.