MPS on Platform Quarterly Review - July 2026

Q2 2026 returns for the W1M (Waverton) Managed Portfolio Service on Platform ranged from +10.9% (Equity) to +5.0% (Conservative)

Equities

Markets were boosted by strong earnings results and easing geopolitical tensions in Q2 and hopes of inflation pressures easing.  

The start of the US-Iran war in Q1 led to oil prices jumping around 76%, the largest rise since the Gulf War, but Q2 saw the largest fall since COVID lockdowns stalled global activity, with oil prices falling 38% from their peaks. Tensions and issues remain but markets have been hoping that there is a gradual move to resolution; there remains a risk of renewed military escalation and markets remain watchful.

Q2 saw the fastest earnings growth for the S&P 500 in two decades, leading to the best quarterly return since the post-pandemic bounce back in Q2 2020. Markets also saw the return of “concentration” in equity markets with around 70% of global equity (MSCI ACWI) returns driven by US and Asian semiconductor and tech hardware stocks. The US semiconductor (Philly, +88.0%) and Korea (+67.9%) saw their best quarters since the 1990s; the Korean index last topped the return in Q4 1998, a year ahead of dot.com peak. Narrow market leadership from Semis Hardware, primarily led by memory names in Asia, and a reversal of sentiment from peace talks in the Middle East dragging on sectors like Energy, did not help our equity portfolios, but a double-digit return was achieved in Q2.

The portfolio benefited from AMD, a US chip designer) being up strongly (+184%) and Taiwan Semiconductor (TSMC, +40%) which also benefited from AI-related semiconductor demand projections. Samsung Electronics (+96%) continued to see supply shortages in the memory space which are supportive of pricing and driving greater demand for long term supply agreements with customers. Other top 10 performers included GE Aerospace (+31%) and United Health (+53%). Weaker performers included Shell (-17%) which gave back some of the outperformance from earlier in the year as market fears around the Iran conflict eased and oil prices moderated.

Activity: during the quarter we sold our position in GE Healthcare, which did not deliver on our margin Improver thesis, and Technip Energies (energy sector weakness and liquidity questions).

Looking ahead, despite narrow market leadership in Q2, we expect a broadening market in the rest of the year given a supportive global macro outlook with easing inflationary pressures and positive earnings growth.

Fixed Income

Market overview: Geopolitical risks eased materially in Q2 as the Middle East ceasefire restored shipping through the Strait of Hormuz and oil prices retraced. The US economy remained resilient, with a strong labour market and contained inflation. Treasury yields and the US dollar moved higher, while the BoE and ECB remained relatively cautious. Credit spreads tightened across developed markets as investor confidence improved.

Drivers of performance: Government bonds were the main contributor, with UK gilt yields falling 16bps over the quarter. Carry and curve positioning in gilts drove returns, supported by tactical SONIA futures trades. The short Japanese government bond position continued to add value. Credit also contributed positively, led by positions such as La Mondiale AT1, Royal London AT1, Burford and Borr Drilling; Brightline and Virgin Media O2 were the main detractors.

Portfolio activity: Core barbell strategy of long-duration government bonds and short-dated credit maintained but we reduced exposure to ultra-long gilts and slightly lowered overall duration while increasing duration exposure in Australia and added to TIPS (US inflation linked fixed income).

Outlook: Yields remain attractive, supporting a constructive outlook for fixed income. Central banks appear likely to resume easing in due course as supply-driven inflation pressures fade. Credit fundamentals remain solid and continue to offer relatively attractive carry. However, tight spreads limit the scope for further spread compression, making security selection increasingly important.

Absolute Return

Structured opportunities were the largest positive contributors, benefitted from the recovery in global equity markets following the March volatility, whilst also retaining defensive characteristics. Price dispersion continued to perform well amidst elevated single stock volatility, benefitting from single stock moves in the AI and semiconductor space particular. We took this opportunity to realise profits and reset dispersion levels. Negative contributors were relatively modest and largely reflected a reversal in some of the themes that had been beneficial in previous periods and  market leadership shifted towards momentum and away from value-focused sectors.

The fund aims to have differentiated return streams with low directional beta - reinforcing its role as a diversifier in broader portfolios.

Real Assets

Real assets continued to deliver positive returns. Infrastructure, Infratil (+30%), was the largest contributor following a major contract win, their largest asset, which secured a 555MW data centre agreement. Quanta Services (+30%), GE Vernova (+34%), Cordiant Digital Infrastructure (+24%) and GEK Terna (+29%) also delivered strong returns. Performance was driven by continued investment in power and grid infrastructure, accelerating electricity demand from AI and data centres, and increasing recognition of the need for significant network upgrades. Commodities  detracted from performance, predominantly driven by gold which corrected over the quarter following an exceptionally strong period of returns.

Activity: We added Transocean to the portfolio, the world’s largest offshore drilling contractor, owning and operating a high-spec fleet of ultra-deepwater drillships and rigs. We exited a holding in Northern Star; this reflected a deliberate reduction in gold exposure.

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