The start of the war in Iran caused both global stock and bond markets to fall. But then the potential for a ceasefire, and eventual agreement to it, in early April had investors pivoting back into stock markets. Add in a bumper earnings season from US companies – driven largely by those heavily involved in artificial intelligence (AI) – and suddenly the US stock market is back at a new all-time high.
Bonds (particularly government and higher quality corporate bonds), on the other hand, haven’t responded as positively since the ceasefire. Concerns around inflation and the direction of interest rates caused by higher oil prices have bond investors twitchy about the future.
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 April have been mixed. The MSCI All Country World index, which reflects performance of global stock markets, grew 4.72%*. Given the onset of the war in Iran, stock market increases of this size are perhaps surprising.
Globally, there were quite different returns. Asian stock markets performed well, returning 6.97% overall, despite the MSCI China index falling 8.96%.
Europe and the UK lagged other regions, returning 0.29% and 2.10%, respectively. Much of the rebound in April has been linked to technology companies and AI spending, and there just are not many Europe or UK companies that are part of this trend.
Three months is also a very short period when looking at investment performance, and as always, past performance isn’t a guide to future returns.
Annual percentage growth
30/04/2021 To 30/04/2022 | 30/04/2022 To 30/04/2023 | 30/04/2023 To 30/04/2024 | 30/04/2024 To 30/04/2025 | 30/04/2025 To 30/04/2026 | |
|---|---|---|---|---|---|
MSCI AC World | 4.72% | 2.48% | 18.47% | 5.31% | 29.31% |
MSCI Asia Pacific ex Japan | -9.23% | -5.21% | 8.29% | 3.94% | 42.44% |
MSCI China | -29.55% | -5.75% | -6.24% | 18.55% | 10.67% |
MSCI Europe ex UK | 0.10% | 13.97% | 8.86% | 6.99% | 19.26% |
FTSE All-Share | 8.72% | 6.04% | 7.50% | 7.53% | 25.21% |
How have bonds performed?
Most bond markets fell over the last three months. The IA UK Gilts sector saw some of the biggest losses, falling 2.34%, and the IA Sterling High Yield sector grew 0.32%. When bond prices fall, the income paid by higher yielding bonds can help to offset falls in price.
Annual percentage growth
30/04/2021 To 30/04/2022 | 30/04/2022 To 30/04/2023 | 30/04/2023 To 30/04/2024 | 30/04/2024 To 30/04/2025 | 30/04/2025 To 30/04/2026 | |
|---|---|---|---|---|---|
IA UK Gilts | -7.71% | -16.09% | -1.11% | 3.40% | 0.12% |
IA Sterling High Yield | -4.18% | -1.34% | 9.52% | 8.01% | 7.27% |
How have mixed asset and total return funds performed?
Funds with more invested in shares have seen better returns than those invested more in bonds over the longer term. We’d expect his given their longer-term growth potential. Those with less in shares don’t tend to perform as strongly over the long run, but they typically experience less volatility than you invested and may provide more shelter during tougher markets.
As a result, funds in the IA Flexible Investment and IA Mixed Investment 40-85% Shares sectors have performed best over longer periods 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 19.56%*.
The IA Targeted Absolute Returns sector was weakest but still returned a decent 7.25%*. It’s expected that this sector won’t perform as well as others when stock markets are strong because of their focus on capital preservation. This is still an attractive return for a one-year period, and the sector tends to hold up better when stock markets are volatile or fall.
The graph below highlights the smoother journey usually provided by funds in the IA Targeted Absolute Return and IA Mixed Investment 0-35% sectors, which has less invested in shares.
Annual percentage growth
30/04/2021 To 30/04/2022 | 30/04/2022 To 30/04/2023 | 30/04/2023 To 30/04/2024 | 30/04/2024 To 30/04/2025 | 30/04/2025 To 30/04/2026 | |
|---|---|---|---|---|---|
IA Flexible Investment | -0.59% | -1.33% | 9.18% | 2.25% | 19.56% |
IA Mixed Investment 0-35% Shares | -3.36% | -3.86% | 4.42% | 4.53% | 8.55% |
IA Mixed Investment 20-60% Shares | -1.27% | -2.70% | 6.42% | 4.02% | 13.00% |
IA Mixed Investment 40-85% Shares | -0.04% | -1.81% | 8.69% | 2.99% | 17.86% |
IA Targeted Absolute Return | 1.33% | 0.52% | 6.41% | 4.73% | 7.25% |
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, they are not expected to perform in the same way.
Remember, a year is a short time when looking at performance and 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 invest only 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 that any new investment forms part of a diversified portfolio.
For more detail on each fund, its charges and specific risks, please see the links to their factsheets and key investor information below.
Schroder Managed Balanced
Schroder Managed Balanced was the strongest-performing multi-asset Wealth Shortlist fund over the past 12 months. It returned 22.09%*, above its IA Mixed Investment 40-85% peer group average of 17.86%.
This is a 'fund of funds', meaning the managers invest primarily 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 that the portfolio offers plenty of diversification.
The manager can invest in emerging markets, high-yield bonds and derivatives, all of which add risk if used.
Troy Trojan
Troy Trojan was the worst-performing Wealth Shortlist fund in the sector, growing 6.06%. That said, it outperformed its benchmark and given its more conservative investment approach, we feel that this is a good outcome for a period when global stock markets performed strongly.
The managers aim to grow investors’ money steadily over the long run while limiting loses when markets fall, rather than trying to shoot the lights out and always perform strongly. They do this by investing in shares, bonds, gold and cash. This diversification helps keep volatility lower than the broader global stock market or a shares-focused portfolio.
The managers have the flexibility to invest in smaller companies and employ derivatives, which, if used, adds risk. The trust is also concentrated, so each investment can contribute significantly to overall returns, but it can increase risk.
Annual percentage growth
30/04/2021 To 30/04/2022 | 30/04/2022 To 30/04/2023 | 30/04/2023 To 30/04/2024 | 30/04/2024 To 30/04/2025 | 30/04/2025 To 30/04/2026 | |
|---|---|---|---|---|---|
Schroder Managed Balanced | -0.93% | -2.74% | 8.54% | 2.52% | 22.09% |
IA Mixed Investment 40-85% Shares | -0.04% | -1.81% | 8.69% | 2.99% | 17.86% |
Troy Trojan | 7.96% | -1.44% | 2.90% | 6.40% | 6.06% |
UK Retail Price Index | 11.13% | 11.42% | 3.27% | 4.47% | 3.03% |