As at 31 March 2026
Fund values and investment return
| Sector | Fund value as at 31 March 2026 (£m) | Fund return 1 April 2025 to 31 March 2026 (%) | Fund return Three years to 31 March 2026 (annualised %) |
|---|---|---|---|
| Sterling Corporate Bonds | 476.2 | +5.7 | +6.2 |
| Multi-Asset Credit | 813.4 | +5.8 | +8.6 |
| Index Linked Gilts | 374.4 | +7.0 | – |
| Cash | 166.1 | +6.6 | +5.6 |
| Passive Equities | 1,568.2 | +16.3 | +13.8 |
| Global High Alpha Equities | 363.0 | +7.3 | +9.2 |
| Global Smaller Companies Equities | 328.2 | +11.9 | +5.3 |
| Emerging Market Equities | 381.5 | +26.0 | +11.7 |
| Sustainable Equities | 644.3 | +7.6 | +5.8 |
| UK Property | 411.1 | +4.2 | +3.1 |
| International Property | 83.8 | +4.8 | -0.1 |
| Infrastructure | 553.9 | +3.3 | +2.3 |
| Private Equity | 195.0 | +9.5 | +5.8 |
| Private Debt | 238.3 | +8.1 | +9.0 |
| Local Impact Portfolio | 130.3 | +1.0 | – |
| Total fund | 6,727.7 | +9.9 | +8.3 |
Key Points about investment performance
- Market returns were positive during January and February, but fell significantly during March as a result of the US decision to launch an attack on Iran, and the subsequent hostilities.
- The active equity portfolios were the main reason for the under-performance against benchmark during 2025/26. Underweights to oil, defence and material companies were the most significant factor over the last quarter. This combined with underweights to the large technology companies with significant AI (artificial intelligence) developments which led performance during 2025 resulted in the under-performance of the Global High Alpha and Sustainable Equities portfolios in particular.
- The Emerging Markets portfolio has delivered the highest absolute performance over the year, but fell below benchmark during the final quarter of the year. The underweight to oil companies, in particular Petrobras, were the major factor in the underperformance over the last quarter.
- Sterling Corporate Bonds and Multi-Asset Credit were negative over the quarter as interest rates rose in response to the Middle East hostilities. Sterling Corporate Bonds remained above benchmark, but Multi-asset credit fell below its cash plus benchmark, due to the negative return. The new Index linked Gilts portfolio is managed passively against the index and was therefore in line with the benchmark. All three portfolios delivered good absolute returns across the year.
- The private market portfolios all showed positive performance across the year, although most were behind benchmark. Three of the five infrastructure investments made prior to Brunel have continued to struggle with problem assets. The below benchmark performance on the Local Impact Portfolio is not a concern giving that the investments are in their early stages, and performance should improve as investments mature.
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 | 27.3 |
| Equities | 48.0 | 48.9 |
| Alternatives/Other | 26.0 | 23.8 |
Key points to note about Asset Allocation
- The Fund value as at 31 March 2026 stood at £6,727.7 million, a decrease of around £111 million over the last quarter, but an increase of around £600 million over the financial year, representing an annual investment return of 9.9%.
- All asset classes are within 2% of the target allocations, with the exception of the Alternatives/Other heading.
- 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.
- As a result of the revised LGPS investment regulations that have now taken effect, future rebalancing decisions will be made by LPPI.