Asset Class Performance Review, Jan-March 2026

The above chart shows the performance of our benchmark funds in the main asset classes for Q1 2026.

Equities

The MSCI World Equity Index (TR) in Euro was down c. 2% for Q1 2026. The year got off to a positive start as strong company earnings news accompanied by a healthy economic backdrop and supportive central bank policy helped risk assets move higher. This positive momentum came to a halt because of the US & Israel’s war on Iran. The rapid rise in oil prices which occurred because of the war helped to stoke inflationary fears while simultaneously weighing on economic growth prospects. This resulted in a turbulent end to the quarter for equities, however the strengthening dollar (seen as a safe haven) helped offset some of the losses for Euro based investors.

Emerging market and smaller companies’ equities outperformed their global counterparts over the quarter.

In the second quarter, markets continue to hope that the war will be short-lived and as a result, fears of stagflation taking hold across major economies are easing. We still believe this is the most likely outcome, however the risks of a more disorderly outcome would increase the longer we go without a negotiated settlement to the conflict.

Bonds

It was a negative quarter for bond markets, as Government bonds marginally outperformed their corporate counterparts. Similarly to equities, the war in Iran was the catalyst that caused the falls in values on the quarter as Central Banks may be forced to pivot away from relatively accommodative monetary policy towards a more restrictive stance. Again, the next steps will be informed by the duration of the war in Iran and whether its inflationary impacts are transitory or longer lasting.

Strains in private credit markets have also caused spreads to widen between corporate and government bonds, albeit these spreads are still low versus history.

Property

Commercial Property funds have thus far proved to be resilient to the uncertainty in the world economy. This is in part due to the fact these assets are less frequently valued than their equity and bond counterparts. As had been the case in 2025, solid income yields alongside relatively stable capital values has helped to produce positive performance in Q1 across our preferred property fund managers.

Cash

The yields on our main Cash funds are currently c. 2% and are in line with the ECB deposit rate. This has remained unchanged over Q1 as the ECB has maintained the status quo regarding interest rate levels. Like other asset classes the duration of the war will be a critical factor on where deposit rates go from here. At end of Q1 investment markets now believe the likelihood of the ECB increasing interest rates is higher than it was at the beginning of the quarter.

Multi-Asset Funds

Balanced multi-asset fund performance took its cue from what was happening more broadly in the world. A strong start to the year subsided as the impact of the war was digested by markets. Medium risk funds typically delivered returns of close to breakeven over the quarter. The asset allocations of our life company partners continue to be positioned with a relatively neutral weighting to equities, and they continue to lean on their diversification assets of Cash, Bonds, Alternatives and Property to help to reduce overall volatility.