In the few months to the end of October 2025, stock markets continued to march upwards and bond yields moved around, with gilt yields ending the period lower. Gold continued what has been an astonishing rally, peaking at over $4,300, before giving up some gains to settle just under $4,000 at the end of October. As always past performance isn’t a guide to the future.
The continued rise in different assets has meant positive returns for many multi-asset funds. Whether this continues is a different matter. Given these rises, the pull-back in markets in November isn’t a surprise and it could well continue over the short-term.
With the UK focused on the ramifications of its recent Budget, globally invested, mixed-asset funds could prove a useful diversifier within an investment portfolio.
This article isn’t personal advice. If you’re not sure whether an investment is right for you, ask for financial advice. Investments and any income they produce can fall as well as rise in value, so you could get back less than you invest.
How have stock markets performed?
Stock market returns over the three months to the end of October have been strong. The MSCI All Country World index, which reflects performance of global stock markets, rose 9.45%* over this period.
Japan led the rebound, largely due to the appointment of their new Prime Minister, Sanae Takaichi on 21 October. The MSCI Japan index returned 14.26% over the same period. The UK lagged and was one of the worst performing regions, although it still returned strong growth of 6.61% over the quarter.
Three months is a short period of time to consider performance and it’s not a surprise to see different returns from regions as investors look to understand the implications of tariffs on global trade.
How have bonds performed?
Bond markets have been more subdued, with investors spending their time considering what central banks might do with monetary policy going forward. The US and UK have twin challenges of sticky inflation and a weakening labour market, which gives central banks a difficult path to tread. For Europe, things are a bit clearer with inflation back near target and their rate cutting cycle effectively at an end.
The strongest performing sector over the three months to the end of October was inflation-linked gilts, with the IA sector returning 2.85%. Government bond yields reduced over the period as this part of the gilt market has high duration.
Duration’s a measure of sensitivity to interest rate and yield changes, with higher duration making the bonds more sensitive. The worst performing sector was high yield, returning 1.69%, however this sector remains the strongest performer over the last 12 months.
How have mixed asset and total return funds performed?
Funds with more invested in shares have seen better returns over the past five years than those that invest more in bonds.
Funds in the IA Flexible Investment and IA Mixed Investment 40-85% Shares sectors performed best over this period because they generally invested more in shares.
The best-performing mixed asset sector over the last 12 months was the IA Flexible Investment sector, which returned 14.38%*.
The worst-performing sector was the IA Targeted Absolute Return sector. The average fund in this sector returned 7.81%*. That said it’s expected this sector won’t perform as well as others when stock markets are strong. This is still an attractive return for a one-year period, and the sector also aims to come into its own when stock markets are volatile or fall.
Performance of mixed asset and total return sectors over 12 months
Annual percentage growth
31/10/2020 To 31/10/2021 | 31/10/2021 To 31/10/2022 | 31/10/2022 To 31/10/2023 | 31/10/2023 To 31/10/2024 | 31/10/2024 To 31/10/2025 | |
|---|---|---|---|---|---|
IA £ High Yield | 9.78% | -11.77% | 6.85% | 14.47% | 7.64% |
IA Flexible Investment | 21.06% | -10.07% | 1.90% | 16.30% | 14.38% |
IA Mixed Investment 0-35% Shares | 7.20% | -11.77% | 0.86% | 11.25% | 8.11% |
IA Mixed Investment 20-60% Shares | 14.61% | -10.79% | 1.70% | 13.65% | 10.55% |
IA Mixed Investment 40-85% Shares | 19.96% | -10.52% | 2.00% | 16.79% | 13.10% |
IA Targeted Absolute Return | 6.58% | -1.56% | 3.05% | 8.26% | 7.81% |
IA UK Index Linked Gilt | 4.57% | -33.81% | -12.09% | 5.04% | -3.87% |
MSCI Japan | 13.44% | -9.96% | 11.23% | 15.85% | 22.94% |
MSCI AC World | 30.04% | -4.25% | 5.37% | 25.91% | 20.54% |
FTSE All Share | 35.40% | -2.78% | 5.89% | 16.30% | 22.50% |
LBMA Gold Price | -11.32% | 10.30% | 15.60% | 29.23% | 43.57% |
How have our Wealth Shortlist funds performed?
Our Wealth Shortlist funds have enjoyed a wide range of outcomes over the past 12 months. But with different approaches and objectives, we don’t expect them to perform in the same way.
Remember, 12 months is a short time when looking at investment performance. Investments should be held for the long term – that’s at least five years.
Investing in these funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.
For more details on each fund and its risks, including charges, see the links to their factsheets and key investor information.
Schroder Managed Balanced
Schroder Managed Balanced was the strongest-performing multi-asset Wealth Shortlist fund over the past 12 months. It returned 15.80%*, above its IA Mixed Investment 40-85% peer group average of 13.10%.
This is a 'fund of funds', meaning the managers primarily invest in funds run by other talented Schroders fund managers, although they can also invest outside of the Schroders range where necessary. Collectively those managers invest in hundreds of different companies and bonds. This means the portfolio offers plenty of diversification.
Over the last 12 months, shares added the most to performance. With the amount invested in shares, it’s expected this will have the biggest impact on overall fund performance. US shares added a lot of value, as did an investment in a UK value style fund. Investments in bonds also gained in value over the last 12 months.
The manager can invest in emerging markets, high yield bonds and derivatives, all of which add risk if used.
Baillie Gifford Monthly Income
Baillie Gifford Monthly Income was the worst-performing Wealth Shortlist fund in the sector over the last 12 months, though it still grew 5.51%.
The managers aim to increase the income paid to investors by more than the increase in the consumer prices index (CPI - a measure of inflation) over the long term.
The fund focuses on providing a resilient income over time, meaning that while the income provided by this fund may not be the highest available, it can be expected to be consistent.
It invests in a diversified set of shares, bonds and real assets (such as property). It’s investments in real assets are achieved through company shares though, meaning most of the fund is invested in shares.
While the fund performed positively over the last 12 months, performance struggled versus peers. Within the shares part of the fund, the income requirement removes a lot of large US companies that don’t pay dividends from their investible universe. This has been a headwind though compared to peers as these companies have performed strongly. At the same time, investments in real assets have lagged the wider market, acting as a further headwind to overall performance.
The income provided by the fund is expected to increase by around 6% in 2025, comfortably ahead of inflation. The fund currently yields 4.14%, though income and yields are variable and not guaranteed.
The managers can invest in emerging markets, high yield bonds and use derivatives, all of which add risk. The fund takes charges from capital, which can increase the amount of income paid, but reduces the potential for capital growth.
Meet the manager: Steven Hay
Annual percentage growth
31/10/2020 To 31/10/2021 | 31/10/2021 To 31/10/2022 | 31/10/2022 To 31/10/2023 | 31/10/2023 To 31/10/2024 | 31/10/2024 To 31/10/2025 | |
|---|---|---|---|---|---|
Schroder Managed Balanced | 22.54% | -12.51% | 2.98% | 14.55% | 15.80% |
Baillie Gifford Monthly Income | 14.51% | -10.42% | 3.39% | 14.27% | 5.51% |
IA Mixed Investment 40-85% Shares | 19.96% | -10.52% | 2.00% | 16.79% | 13.10% |