Client Update - 9th January 2026

Looking back on last year, it was very pleasing to see that investment returns defied the barrage of political and economic noise throughout the year. In spite of ongoing debates around whether governments are spending too much, if the economy can continue to grow, the impact of military flare-ups across the world, and concerns over various market bubbles, nonetheless major equity indices were up between 12-20% in 2025, with the fourth quarter doing nothing to halt the gains.

The end of the year was relatively quiet in terms of geopolitical events. Trade negotiations between major economies held steady, with incremental progress on US-China tariff discussions. This stability, combined with a weaker US Dollar, continued to support asset prices across the world. Whilst Trump has quickly escalated tensions with events in Venezuela, the markets have continued to make positive progress.

In a year where double-digit returns were relatively common, regardless of geography, it’s worth reflecting that the standout developed market was probably the FTSE 100 Index, rising nearly 22%, and making all-time highs. The diversified sectors within the FTSE 100 are increasingly attractive to investors worried about paying too much for technology companies, and looking for undervalued, “old-school” businesses – mining companies in particular. With UK stocks still far from expensive, this has the potential to continue well into 2026.

In the other parts of portfolios, bond markets stayed orderly despite headlines about rising government borrowing – after all, where else can investors looking for stability turn to, if not major governments? This reinforces the role of fixed income as a source of stability over the medium term, especially when blended with other alternative investments that can do well when equities aren’t producing double-digit returns.

2025 ended up being a fantastic example of how a disciplined and diversified investment process can help navigate confusing times. The next few years are unlikely to be any calmer (although we can hope), so it’s comforting to be prepared already. Do have a good weekend.