As at 30 June 2025
Fund values and investment return
| Sector | Fund value as at 30 June 2025 (£m) | Fund return 1 April 2024 to 30 June 2025 (%) | Fund return three years to 30 June 2025 (annualised %) |
|---|---|---|---|
| Sterling Corporate Bonds | 462.9 | +2.8 | +4.1 |
| Multi-Asset Credit | 789.1 | +2.6 | +9.5 |
| Index Linked Gilts | 272.0 | +3.6 | – |
| Cash | 158.4 | +1.7 | +4.1 |
| Passive Equities | 1,521.8 | +7.2 | +14.0 |
| Global High Alpha Equities | 376.5 | +4.4 | +12.4 |
| Global Smaller Companies Equities | 316.5 | +7.9 | +7.7 |
| Emerging Market Equities | 318.2 | +6.5 | +5.5 |
| Sustainable Equities | 619.3 | +3.4 | +7.8 |
| UK Property | 411.4 | +1.0 | -3.9 |
| International Property | 93.3 | +1.8 | +0.6 |
| Infrastructure | 554.1 | +1.8 | +5.1 |
| Private Equity | 141.3 | +1.0 | -1.5 |
| Private Debt | 228.5 | +0.4 | +7.5 |
| Local Impact Portfolio | 90.4 | +1.1 | – |
| Total fund | 6,353.7 | +4.1 | +7.9 |
Key Points about investment performance
- The quarter started off with Trump’s “liberation day”, where the US laid out plans for heavy trade tariffs across the globe. Global equity markets did not take kindly to these proposals and had subsequently dropped to -9% by the 8th of April. However, from this trough onwards, the markets saw a sense of optimism as concessions were made on various different tariffs on several different goods. The MSCI ACWI eventually saw a swing of 14% to the upside, finishing the quarter 5% up.
- The Global and High Alpha and Sustainable Equities both under-performed again. Both portfolios were ahead of benchmark during April, but as markets bounced back during May and June, the same themes as the previous year played out, with 5 of the large 7 technology stocks again leading the market, resulting in under-performance of both portfolios which are underweight to those stocks.
- In contrast, the Global Smaller Companies portfolio out-performed strongly. The recovery in small caps was broader, due to more domestically focussed supply chains and geographic revenue exposures. Overweight exposure to IT and Industrials, the two best performing sectors over the quarter, and underweight exposure to Energy and Real Estate, along with strong stock selection, made positive contributions to relative performance.
- The quarter was also positive for bond markets. The Brunel Sterling Corporate Bond portfolio returned +2.8% net of fees, which was almost exactly in line with the benchmark return. The strong performance was driven by a fall in both government bond yields and credit spreads. The Multi-Asset Credit portfolio returned +2.6%, which was ahead of the target return (SONIA+4%).
- 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.
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 | 26.5 |
| Equities | 48.0 | 49.6 |
| Alternatives/Other | 26.0 | 23.9 |
Key points to note about Asset Allocation
- The Fund value as at 30 June 2025 stood at £6,353.7 million, an increase of around £225 million over the last quarter.
- As agreed at the March meeting of the Committee an allocation of £272 million to Index Linked Gilts was made during the quarter, funded by the liquidation of the Diversified Returns Funds portfolio and a reduction in the allocation to Passive Equities.
- Sterling Corporate Bonds and Multi-Asset Credit are both slightly above the target asset allocation. As agreed by the Committee in June 2023, the level of cash being held is currently above the 1% target.
- The Equity allocation is 1.6% above the target weight. Given that equity markets have been positive during the current quarter, it is proposed to redeem a further £50 million split between passive equities and Global High Alpha and increase the investment in Index Linked Gilts up to the 5% target.
- The main underweight allocation continues to be that to Alternatives/Other.
- The Property allocation is now in line with the revised target.
- Infrastructure, Private Equity, Private Debt and the Local Impact portfolio are all marginally below their target allocations. In each case, significant commitments remain to be drawn which will take the allocations up towards the target, but we are dependent on when the funds that have been committed to identify opportunities for investment which will result in further drawdowns of our capital.