A dynamic, multi-asset portfolio spanning global equities, fixed income and alternatives. Built from listed ETFs, adjusted each quarter, and run to a target of around 10% annual volatility.
The backdrop into early 2026 is steady but unspectacular growth, with world output near 2.5 to 3%. The US holds around 2%, Europe is picking up on defence and infrastructure spending, China is stabilising on stimulus, and India is resilient after a recent earnings correction. US inflation is cooling but still sticky at 2.5 to 3%, keeping the Federal Reserve cautious; the funds rate sits at 3.50 to 3.75% with two to three cuts expected this year. The European Central Bank is more dovish, while the Bank of Japan is the one major bank still tightening. A softer dollar supports emerging markets, commodities and gold.
The US looks expensive, so we hold the largest underweight the mandate allows and spread that money across the rest of the developed world. India is the standout on the cheap side, around 39% below its ten-year average and the cheapest major market we follow; with the Reserve Bank of India easing we hold deep value tactical overweights through a dedicated India position. China is the next cheapest large market and earns a similar overweight, both funded by trimming the broad emerging market core rather than adding equity risk. Gold sits at our highest conviction weight of 16%, on a structural bull case near the $5,000 level driven by central bank buying and the move away from the dollar.
Overall we run slightly less equity, 50% against a long-term 55%, while lifting bonds to 22% and alternatives to 27%. Within bonds we prefer emerging market debt for its higher income, near 7% against roughly 4% in the US, and favour hedged international developed bonds as the European Central Bank eases. We stay light on high yield, where spreads are tight and offer little cushion. The portfolio targets around 10% annual volatility, with risk concentrated where valuations and policy are most clearly on our side.
Long-term % is the strategic baseline. This quarter % is the current tactical weight. Developed market equity is held through region funds; emerging markets through a broad core fund plus single-country positions in India and China.
| Asset | Fund | Long-term % | This quarter % | Change | Position | Notes |
|---|---|---|---|---|---|---|
| Developed market equity — long-term 49.0%, now 42.0% | ||||||
| United States | VTI | 34.5 | 27.5 | –7.0 | Under | The most expensive major market and heavily concentrated in a few large technology names. Held at the largest underweight allowed. |
| Europe ex-UK | VGK | 6.5 | 6.5 | — | Neutral | Central bank easing and fiscal expansion offset full valuations in France and Germany. Held at benchmark weight. |
| Japan | EWJ | 2.8 | 2.2 | –0.6 | Under | Bank of Japan tightening and a firmer yen are both headwinds. |
| United Kingdom | EWU | 1.8 | 1.5 | –0.3 | Under | Trading well above its ten-year average with fiscal tightening underway. |
| Australia | EWA | 1.0 | 1.0 | — | Neutral | Mining strength already priced in. Held at benchmark weight. |
| Rest of developed world | URTH | 2.4 | 3.3 | +0.9 | Over | Absorbs the weight freed up from the US, Japan and UK. Covers Canada, Hong Kong, Singapore and others. |
| Emerging market equity — long-term 6.0%, now 8.0% | ||||||
| Broad emerging core | IEMG | 6.0 | 4.0 | –2.0 | Under | Trimmed to fund the India and China positions. Still covers Korea, Taiwan, Brazil, Mexico and others. |
| India | INDA | — | 2.0 | +2.0 | Over | The cheapest major market, around 39% below its ten-year average. Reserve Bank easing and steady structural growth. Funded from the core. |
| China and Hong Kong | MCHI | — | 2.0 | +2.0 | Over | The cheapest large market, around 7% below average. Stimulus is stabilising the economy. Funded from the core. |
| Bonds — long-term 20%, now 22% | ||||||
| US aggregate bonds | AGG | 7 | 6 | –1 | Under | Sticky US inflation of 2.5 to 3%. A core holding but trimmed. |
| International developed bonds (hedged) | BNDX | 5 | 6.5 | +1.5 | Over | European Central Bank easing makes European bonds attractive and adds duration. |
| Inflation-linked bonds | TIP | 2 | 2.5 | +0.5 | Over | A hedge against inflation that is proving slow to fall. |
| High yield | HYG | 2 | 1.5 | –0.5 | Under | Spreads near their tightest levels with little cushion if conditions turn. |
| Emerging market dollar bonds | EMB | 2 | 2.5 | +0.5 | Over | Yields close to 7% and improving government finances across emerging markets. |
| Emerging market local bonds | EMLC | 2 | 3 | +1 | Over | Currency upside as the dollar weakens. This position sits above our usual single-holding limit, which we have noted. |
| Alternatives — long-term 24%, now 27% | ||||||
| Gold | GLD | 13 | 16 | +3 | Over | Around $5,000 an ounce. A structural bull market on central bank buying and the move away from the dollar. Our highest conviction. |
| Broad commodities | GSG | 5 | 4 | –1 | Under | Energy soft. Metals and agriculture mixed. |
| Global property | VNQ | 6 | 7 | +1 | Over | A beneficiary of rate cuts, with valuations normalising. |
| Cash | SHV | 1 | 1 | — | Steady | Held steady at 1%. A Treasury bill proxy yielding above 5%. |
| Total | 100% | 100% | Both the long-term mix and this quarter add to 100%. | |||
Five years, March 2021 to February 2026. Monthly rebalancing. Growth of $100. Figures are approximate, based on asset class returns and the tactical positioning over the period.
The strategy's outperformance came from three places. Gold was the biggest single contributor: holding 13 to 16% through the run from around $1,800 to $5,000 an ounce in 2024 and 2025 added roughly 5% a year. Defensive positioning in 2022, with less equity, more gold and inflation-linked bonds, cushioned the rare year when both stocks and bonds fell together, holding the worst peak-to-trough loss to about 13% against nearly 20% for the benchmark. Finally, the tactical positions in India and China, added at their valuation lows between 2023 and 2025, captured the recovery while the broad emerging market holding kept the portfolio diversified.