The World In A Week - UK equities shine and the “Takaichi-trade”
Written by Chris Ayton
The MSCI All Country World Index of global equities ended the week up +2.5% and is now up +13.5% this year. In global fixed income markets, the Bloomberg Global Aggregate Index was up +0.1% over the week in GBP Hedged terms and is now up +5.0% in 2025 so far.
The UK equity market enjoyed a strong week, rising +3.2% and is now up a very healthy +20.3% year-to-date. UK economic data releases over the week were generally positive, notably September’s annual inflation reading that came in at 3.8% which was below most expectations and, in some minds, increased the chances that the Bank of England could cut interest rates again before year-end. UK retail sales, a measure of consumer spending, also rose unexpectedly driven by demand for computers and telecommunications and online jewellers reporting strong demand for gold.
Japanese equities also enjoyed a boost from Sanae Takaichi being confirmed as Japan’s first female Prime Minister. It is generally regarded that Takaichi, who wants to be Japan’s “Iron Lady”, will be positive for the Japanese equity market and will be pushing for some additional stimulus to boost defence spending and also help support households feeling the impact of inflation. MSCI Japan was up +2.2% over the week taking the index to +15.4% for the year so far. Commentators are already collectively calling this the “Takaichi-trade” although, even with the new coalition with the Japan Innovation Party in place, it remains to be seen how much of the new spending plans and potential tax cuts she will manage to get through parliament.
After a stellar run, the shine came off gold last week, breaking a nine-week winning streak as trade tensions between the U.S. and China seemingly cooled, easing safe-haven demand. However, the oil price jumped as the US announced sanctions on Russia’s two largest oil companies, Lukoil and Rosneft, which will also likely result in other large importers like China and India curbing their purchases of Russian oil, switching their demand elsewhere. Such politically driven volatility underlines how hard it is to predict short-term commodity prices and this is why in the lower risk YOU funds and portfolios, instead of betting on single commodities, we maintain a broadly diversified exposure to commodities. The wider Bloomberg Commodity Index, which allocates across 24 different commodities, rose +1.7% over the week and is up +12.5% year-to-date, both in GBP hedged terms.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 27th October 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - There’s never just one cockroach…
Written by Cormac Nevin
The title of this piece refers to an old saying in financial markets, often attributed to Warren Buffett, but employed last week by the CEO of JPMorgan Chase when discussing a string of corporate bankruptcies that rattled credit markets.
The bankruptcies that Jamie Dimon said had “got his antenna up” included First Brands Group - a U.S. auto-parts maker that filed for bankruptcy protection in late September; Tricolor Holdings - a U.S. sub-prime auto-lender and dealership group that entered liquidation in September; and Zions Bancorporation - a U.S. regional bank that announced a US$50 million loan write-off tied to two borrowers who, it said, misrepresented information and pledged collateral improperly.
The problem is simple enough: money has become expensive again. Central banks have been trying to keep policy “restrictive” to ensure inflation stays buried, but that means companies rolling over debt issued during the zero-rate years are now facing vastly higher costs. A business that borrowed at 3% in 2021 might now be staring at 8% or more. That’s manageable if revenues are growing - but many firms are seeing demand soften as consumers tighten their belts and government support fades.
For now, equity markets remain remarkably calm, with the MSCI All Country World Index up +0.5% last week. However, at the margin, these developments make us cautious about the lower-quality end of credit markets. The explosive growth of private credit and private equity activity in these areas has made them substantially more opaque, and the lack of frequent market-based pricing means risks can accumulate before they become widely apparent.
We remain biased towards high-quality sovereign fixed-income assets at this juncture and only employ highly specialised active managers for the modest amount of credit exposure we currently bear.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 20th October 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Looking beyond short-term volatility
Written by Ashwin Gurung
Japanese equities gained over the week after Sanae Takaichi won the Liberal Democratic Party (LDP) leadership election, with the MSCI Japan Index up +2.8% in local currency terms as investors reacted positively to her likely appointment as Japan’s next prime minister and her plans to support the economy through increased government spending, tax cuts, and subsidies. The Japanese yen, meanwhile, weakened -1.6% over the week vs GBP, this offset most of the local currency gain for GBP-based investors, resulting in a modest return of +0.7% for the MSCI Japan index.
However, further uncertainty emerged after markets closed on Friday, when the LDP’s long-standing coalition partner announced they were leaving the coalition, citing policy disagreements and concerns over a previous funding scandal. This has created short-term political uncertainty and prompted speculation about a possible snap election. While we stay abreast of market developments, we do not base our investment decisions on political outcomes. We believe that the ongoing corporate governance reforms and resilient consumer demand in Japan continue to support our positive long-term view.
In the US, equities were weighed down by renewed concerns over trade tensions with China and the ongoing government shutdown. Investors became more cautious after President Trump suggested the possibility of additional tariffs of 100% on Chinese products in response to China’s new export controls on rare earths, which are key materials used in electronics and clean energy, adding to existing geopolitical uncertainty. This increased volatility in US and Chinese equities, and drove demand for safe-haven assets like US Treasuries and gold. The S&P 500 and MSCI China indices fell -1.2% and 2.1%, respectively, over the week, but our long-dated US Treasury exposure performed well, returning +1.4% and providing effective diversification for our portfolios.
Across Europe, political turmoil in France and ongoing trade tensions weighed on market sentiment towards the end of the week. A drop in German industrial output also raised recession worries, with the MSCI Europe ex-UK index falling -1.4%. Meanwhile in the UK, housing markets slowed in September, with prices and buyer demand remaining soft. Higher borrowing costs, ongoing inflation, and worries about possible tax rises ahead of the November budget all contributed to the weaker sentiment.
This year continues to highlight the importance of a well-diversified portfolio amid ongoing uncertainty, not just across different geographies but also across a range of asset classes and investment styles. We remain aware of market developments but remain focused on our long-term view.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 13th October 2025.
© 2025 YOU Asset Management. All rights reserved.
Two Minute Missive - 8th October
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your financial planner before undertaking any investments.
The World In A Week - Continued gains on AI optimism and rate cut expectations
Written by Dominic Williams
Global equity markets moved higher last week, with the MSCI All Country World Index rising by +1.2%, supported by growing expectations that the US Federal Reserve could continue cutting interest rates after its first move of 2025 last month. Technology stocks also provided a lift, as optimism around artificial intelligence continued to drive investor sentiment.
In the UK, the economic picture remained mixed. Consumer borrowing grew at its fastest pace in almost a year, suggesting households are still willing to spend, even as credit card borrowing eased slightly compared to the previous month. Political attention centred on the Labour Party conference, where Chancellor Rachel Reeves reaffirmed her commitment to fiscal discipline and maintaining market confidence. Despite the debate around government borrowing, UK equities performed well, with the FTSE All Share posting solid gains, up +2.3% over the week, with the more domestically focused FTSE 250 gaining +2.5%. We continue to see opportunities in the UK market, which remains attractively valued compared to many international peers.
Japan had a steadier week, with markets holding near record highs, the MSCI Japan gained +0.4%. Growth-focused companies outperformed, particularly in the technology sector, as enthusiasm for AI-related businesses spilled over from global markets, following OpenAI’s $6.6 billion share sale, which valued the firm at $500 billion. The recent leadership election brought a historic moment, with Sanae Takaichi becoming Japan’s first female prime minister. While this is a significant political milestone, we believe the long-term drivers of Japan’s market, such as corporate governance reforms and improving capital efficiency, remain the key reasons for our positive outlook.
In the US, markets showed resilience despite the start of a government shutdown, which delayed the release of official employment data. Investors instead focused on private sector reports that pointed to a softer labour market, reinforcing expectations for interest rate cuts in the months ahead. The S&P 500 ended the week higher, gaining +0.6%, reflecting confidence that monetary policy will become more supportive.
Overall, the week highlighted a balance between optimism about easier monetary policy and caution over political and fiscal risks. In this environment, maintaining a diversified and disciplined investment approach remains the most effective way to navigate uncertainty.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 6th October 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Minority rules
Written by Shane Balkham
Last week was littered with speeches from central bankers, which would not normally generate too much attention, however one of those central bankers was newly appointed Federal Reserve governor Stephen Miran. It is suspected that Stephen Miran, who was appointed by President Trump to the board of the Federal Reserve just two weeks ago, was the outlier in the ‘dot plot’ forecasts.
Every quarter, each member of the Federal Reserve individually forecasts where they consider rates to be at the end of the year. Normally the spread between the highest and lowest dot is around 1%, however, in the dot plot forecast issued at the last Federal Reserve meeting, there was a significant outlier which was 1% below the other lowest forecast.
It means that cuts of 1% for the remainder of this year are expected by this member, in addition to the 0.5% expected by the majority of the committee. All doubts were erased when Stephen Miran’s speech to the Economic Club of New York was centred around reducing rates by 2%, arguing that the current level is too high, advising that he has concerns about the direction of the US jobs market and the risks of unnecessary layoffs.
The US continued to dominate the headlines, with President Trump’s comments on Ukraine and Russia, which presented a change of tone. This was followed by a proposed series of new trade tariffs. US buyers of foreign vanity units, soft furnishings, and pharmaceuticals will be subject to new tariffs. The furniture tariffs, applied on national security grounds, are likely to have a muted impact, as they are not high-frequency purchases, however, the 100% pharmaceutical tariff applies only to branded drugs, and constructing a factory in the US may lead to an exemption. Many pharmaceutical companies already have facilities in the US, so it may be relatively easy to superficially expand those facilities to avoid tariffs being applied.
Where the US is not dominating is in market returns. The range of geographical contribution to global equity returns has been high in 2025, particularly for UK investors investing in Sterling. Q1 saw European equities outperform (including UK equities), Q2 saw broad-based returns across global equities, and so far in Q3, with just two days to go, Emerging Market and Japanese equities have outperformed.
This year is demonstrating the importance of being appropriately diversified, both in terms of having a spread of different investments over different geographies, but also in having a spread of different asset classes.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 29th September 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Opportunities in Emerging Markets
Written by Chris Ayton
Despite ongoing political and geopolitical strife in Europe, the US, and elsewhere, last week was generally a positive one for both equity and bond investors as markets focused more on the growing belief that, due to a slowing jobs market and sufficiently benign inflation reading, the Federal Reserve in the US will be able to cut interest rates a bit faster than previously expected. The MSCI All Country World Index of global equities ended the week up +1.5% and is now up over +8.3% this year. In fixed income markets, the Bloomberg Global Aggregate Index was up +0.2% in GBP Hedged terms over the week and is now up +4.0% in 2025 so far.
Emerging Markets have been enjoying a bit of a renaissance and as measured by the MSCI Emerging Markets Index, were up another +3.7% last week. This takes the index to +16.5% for the year-to-date. A weakening US Dollar, which is what we have seen this year, is generally considered good for Emerging Markets but, as ever, the underlying countries are far from homogeneous. The volatility in US tariffs has created great uncertainty, and there has been a huge divergence of returns across the constituents that make up the broad Emerging Markets Index. For example, Korea’s index is up over 40% this year, aided by an unusual bout of political stability, a number of technology related companies benefitting from AI expenditure and also a theme known as “value up” which is a government driven drive to force badly managed or in some cases, corrupt companies, to manage their business for the benefit of their shareholders. Although at a much earlier stage, there are hopes that this can drive a genuine change in corporate governance in Korea, similar to that we have observed in Japan in recent years.
While Korea has been enjoying its time in the sun, a previous market darling, India, has seen its MSCI Index fall by more than 7% in 2025. Economic growth in India has continued to be solid, with GDP forecasts approaching 7% in real terms for 2025. However, unlike other emerging market currencies, the Indian Rupee has weakened sharply, depreciating over 10% against Sterling this year, and many equities have been hit as concerns have mounted over the impact of punitive US tariffs, which were recently increased from 25% to 50% as punishment for India purchasing large amounts of discounted Russian oil. President Modi has been trying to offset the economic impact of US tariffs with a round of domestic stimulus, including a recent cut in the Goods & Services Tax (the Indian equivalent of VAT). However, with equity valuations having started the year at historically elevated levels, international investors have been taking a more cautious stance. Indeed, last week it was reported by Goldman Sachs that foreigners have sold $28bn of Indian equities over the last year.
If we look back one year ago, Indian equities were universally loved, and China was widely detested with investors regularly asking us whether China’s stock market was “investible” anymore. Since this point, MSCI China has outperformed MSCI India by nearly 70% (MSCI China +56.5%, MSCI India -12.5%). This type of volatility within a backdrop of ongoing tariff-related uncertainty is why within our Multi-Asset Blend Funds we choose to primarily utilise active managers within Emerging Markets, some of whom seek out the highest growth companies in Emerging Markets and others who look for hidden value where others aren’t looking. It is interesting to us that our primary “value” oriented manager in Emerging Markets that increased its China allocation when it was unloved, has started dipping their toes into India. However, government policy and standards of corporate governance across Emerging Markets remain volatile, and astute company selection and prudent diversification by country and investment style remain key when seeking to capitalise on the plentiful opportunities in these ever-inefficient markets.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 15th September 2025.
© 2025 YOU Asset Management. All rights reserved.
Two Minute Missive - 11th September
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your financial planner before undertaking any investments.
The World In A Week - When politics interferes with markets
Written by Ilaria Massei
Last week, headlines were dominated by political turmoil across key regions, and global bond markets outperformed global equity markets with the Bloomberg Global Aggregate Hedged Index delivering +0.1% and the MSCI All-Country World Index sliding -0.3%.
In the United States, President Donald Trump surprised the world by announcing the decision to fire Federal Reserve Governor Lisa Cook. While it remains highly likely that Cook will contest the removal in court, possibly escalating the matter to the Supreme Court, the move has reinforced perceptions that the White House is attempting to exert greater influence over monetary policy. This political interference has raised questions about the Fed’s independence in its monetary policy decisions, with expectations now pointing to more interest rate cuts, with the first to be delivered as soon as September.
Across the Atlantic, political uncertainty also weighed on European sentiment. In France, Prime Minister François Bayrou called for a vote of confidence to take place on September 4th, reflecting his struggle to pass a budget amid rising fiscal constraints. The uncertainty around the ability of the country to fund its expenses led to an increase in French government bond interest rates, as investors demand higher compensation for the increased risk of not being repaid. While these political developments are closely watched by our team, we do not invest directly in French bonds, but prefer investing with a global, more diversified approach to Fixed Income markets.
Amid these macro-political events, the spotlight also turned to corporate earnings, with Nvidia reporting its highly anticipated results last Wednesday. The chipmaker beat revenue expectations, reflecting continued demand in the AI and GPU sectors. However, its data centre revenues - a key driver of recent performance - came in slightly below consensus estimates, with the division generating $41.1 billion in revenue, up 56% from a year earlier, but just below the $41.3 billion analysts had forecast. As a result, the company’s share price gave back some of its recent gains.
Taken together, last week’s events highlight the increasingly complex interplay between political developments, central bank policy, and corporate performance. As markets respond to these factors, investors will need to stay nimble and avoid focusing on a single market to manage risk and capture opportunities wherever they arise.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 1st September 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Keep your allies near and your rivals closer
[Image source: White House Gallery]
Written by Ilaria Massei
The event that received the most attention last week was the deal between Donald Trump, President of the United States of America, and Xi Jinping, President of China. They met at the Asia‑Pacific Economic Cooperation Summit 2025 in South Korea and reached a one-year trade deal, with China agreeing to postpone export controls on rare earths (metallic elements essential in smartphones, laptops, electric vehicles and defence equipment) and semiconductors and the US to ease tariffs on shipping and fentanyl-related goods (chemicals, ingredients, and equipment used to make or distribute fentanyl), to improve cooperation with China in controlling the illegal production and flow of fentanyl. Both leaders emphasised a shared vision of “prospering together” in their first such meeting in years. While investors viewed the agreement as potentially temporary, it was warmly welcomed by markets eager for stability - freeing global equity markets to move higher with the MSCI All Country World Index up + 1.7% over the week.
While equity markets were buoyant, bond markets were more cautious as the Federal Reserve (Fed) delivered an expected 25-basis-point rate cut but Fed Chair, Jerome Powell, tempered expectations, stating that another cut in December is “not a foregone conclusion.” The news was not well received by the US Treasuries market with long-dated Treasuries (as represented by the Bloomberg US Treasury 20+ Years) declining -1.2% in USD on worries that there might not be enough rate cuts in the future to support the economy.
While tariffs and monetary policy dominated US headlines, this week’s earnings announcements provide important context for assessing the health of corporate activity. European banks continued to perform well - with Crédit Agricole & Santander among the standouts - while UK Banks like NatWest reported their highest quarterly profits since 2008. In contrast, US technology firms faced a volatile week as investors struggled to reconcile enthusiasm for AI with concerns about excessive spending. None of Google (Alphabet), Meta, or Microsoft are willing to stop spending on AI yet and together have spent nearly $80 billion last quarter on AI infrastructure. While Alphabet’s shares rose on record revenues and increased capital spending plans for 2025, Meta and Microsoft declined as profits have come under pressure due to increasing costs on AI-related expenses. Hyperscalers - such as Microsoft, Google, and Meta - are the largest cloud and technology companies investing heavily in building and expanding AI infrastructure. Nvidia, on the other hand, is a key supplier to these players, providing the advanced graphics processing units (GPUs) and hardware needed to power AI applications. While hyperscalers are seeing pressure on profits due to their massive capital spending, Nvidia continues to benefit as long as this investment cycle in AI infrastructure remains strong - at least for now.
During weeks characterised by high news flow and market volatility, we think that adopting a global investment perspective is essential. It enables the identification and capture of opportunities across diverse markets, rather than restricting exposure to a single region.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 3rd November 2025.
© 2025 YOU Asset Management. All rights reserved.