As at 31 December 2025
Fund values and investment return
| Sector | Fund value as at 31 December 2025 (£m) | Fund return 1 April 2024 to 31 December 2025 (%) | Fund return three years to 31 December 2025 (annualised %) |
|---|---|---|---|
| Sterling Corporate Bonds | 482.3 | +7.1 | +7.6 |
| Multi-Asset Credit | 818.6 | +6.5 | +9.8 |
| Index Linked Gilts | 370.8 | +6.0 | – |
| Cash | 152.4 | +5.5 | +5.0 |
| Passive Equities | 1,650.9 | +22.4 | +18.2 |
| Global High Alpha Equities | 382.2 | +12.9 | +13.7 |
| Global Smaller Companies Equities | 322.8 | +10.0 | +6.4 |
| Emerging Market Equities | 378.1 | +26.5 | +12.7 |
| Sustainable Equities | 664.3 | +10.8 | +8.8 |
| UK Property | 409.2 | +3.3 | +1.7 |
| International Property | 95.4 | +3.8 | -0.3 |
| Infrastructure | 558.1 | +3.6 | +3.0 |
| Private Equity | 182.9 | +7.8 | +4.5 |
| Private Debt | 240.2 | +5.5 | +8.0 |
| Local Impact Portfolio | 130.3 | +0.9 | – |
| Total fund | 6,838.5 | +11.6 | +10.1 |
Key Points about investment performance
- The Fund achieved a positive return of 2.3% for the quarter to 31 December, taking the return for the financial year to date up to 11.6%. The returns for the financial year to date, 3 years and 5 years are above the LGPS Universe average.
- Equity market returns have rebounded significantly since the downturn in March/April resulting from President Trump’s tariff proposals. As a result equity returns for the financial year to date are well into double figures.
- The Global and High Alpha and Sustainable Equities continued to under-perform their benchmark indices. Underweights to the big tech companies, particularly those related to AI (Artificial Intelligence), and banks were the key factors. An underweight to the defence sector also detracted from performance. The Global Small Cap portfolio also under-performed over the quarter, reversing the out-performance of the previous quarter. The quarter saw a “dash to trash” with small cap investors preferring under-valued companies over the quality/growth companies that the Brunel portfolios predominantly invest in.
- The Emerging Markets portfolio has performed strongly, with the highest absolute return, helped by a weakening US Dollar, and is also ahead of benchmark.
- The year to date has also been positive for the Sterling Corporate Bond and Multi-Asset Credit portfolios, although returns were more modest than equities. Both portfolios have out-performed their respective benchmarks over the year to date and the three year period. The new Index linked Gilts portfolio is managed passively against the index and was therefore in line.
- The private market portfolios all showed positive performance, although performance relative to benchmark was mixed. Three of the five infrastructure investments made prior to Brunel have continued to struggle with problem assets. The small negative performance on the Local Impact Portfolio is not a concern giving that the investments are in their early stages.
Overall Asset Allocation
The current asset allocation, compared to the target asset allocation, is shown in the table below:
| Asset | Target allocation (%) | Actual allocation (%) |
|---|---|---|
| Fixed interest and cash | 26.0 | 26.7 |
| Equities | 48.0 | 49.6 |
| Alternatives/Other | 26.0 | 23.7 |
Key points to note about Asset Allocation
- The Fund value as at 31 December 2025 stood at £6,838.5 million, an increase of around £168 million over the last quarter, and £708 million over the financial year to date.
- Following the rebalancing undertaken during October and November, the overweight to Equities has reduced. It remains 1.6% over target, but is now within 2% of the target. Sterling Corporate Bonds, Multi-Asset Credit, Index-Linke Gilts and cash are all at or slightly above the target allocation.
- Within the Alternatives/Other heading, all the allocations are below target. In all cases except Property, there are still undrawn commitments which would take those investments up to their target levels, but this will take time. We are dependent on the fund managers identifying opportunities for investment which will result in further drawdowns of our capital.
- No further rebalancing is proposed.