Q3 2025

Setting a new standard in peer group insights

Global equities delivered solid gains in Q3 2025, with US and UK stocks rising around +8% and European markets advancing roughly +3% in local terms. Investor sentiment remained constructive, driven by strong performance in technology and AI-related sectors and supported by the US Federal Reserve’s interest-rate cut.  

On the bond side, USD government bonds generally held up better than their GBP and EUR counterparts in local-currency terms. UK gilts posted modest losses as rising yields outweighed the income, while European government bonds remained flat to slightly negative amid yield increases and elevated risk premiums. 

Against this backdrop, peer group returns behaved as expected: the Cautious Peer Group delivered modest gains, the Balanced Peer Group captured a meaningful share of the equity rally, and the Growth Peer Group generated the strongest returns, albeit generally a touch behind the Benchmark Portfolio*, which benefited from the full market upswing.  

Cautious Peer Groups
Cautious Peer Groups achieved steady gains in Q3, delivering roughly +2.3% to +3.6% across GBP, USD, and EUR. These low-risk portfolios slightly outperformed their respective Benchmark Portfolios and continued to exhibit very low volatility, in line with expectations for the capital preservation focused risk profile. Year-to-date performance shows a wider dispersion, with returns of +3.0% (EUR), +6.2% (GBP), and +8.2% (USD). 

The equity allocation is approximately 31%, while fixed income and cash are around 59%. The remaining approximately 10% is invested in hedge funds, commodities, and other alternatives.  

Balanced Peer Groups
Balanced Peer Groups generated solid quarterly returns of +3.8% to +4.8% across the three currencies. This outcome captured most of the equity market rally during the quarter. Both the GBP and USD Peer Groups maintained pace with their respective Benchmark Portfolios, while the EUR Peer Group marginally outperformed. Year-to-date performance shows a wider dispersion, with returns of  +3.3% (EUR), +6.3% (GBP) and +10.4% (USD).  

The equity allocation is approximately 52%, fixed income and cash are 37%, leaving roughly 11% in hedge funds, commodities, and other alternatives. 

Growth Peer Groups
Growth peer groups delivered the highest returns, rising roughly +3.8% to +6.0%, reflecting their higher equity exposure. However, they generally lagged the Benchmark Portfolio by 0.5% to 1%, indicating that portfolios within higher-risk mandates did not fully capture the strength of this quarter’s stock-market rally. Year-to-date performance shows a wider dispersion, with returns of  +0.9% (EUR), +6.7% (GBP) and +11.8% (USD).  

The equity allocation is about 70%, with EUR having notably lower equity exposure (by 7%) compared to its USD and GBP counterparts. Fixed income and cash are around 21% (EUR is about 5% higher), leaving about 9% in hedge funds, commodities, and other alternatives. 

Cross-Currency Comparison
This quarter, performance varied across the GBP, USD, and EUR Peer Groups, reflecting differing regional equity trends, bond market dynamics, and currency movements. GBP and USD Peer Groups outperformed EUR Peer Groups in base-currency terms. Softer European equity markets weighed on EUR portfolios, while stronger UK markets and the US tech rally supported GBP and USD peers. 

GBP peer groups also benefited from higher allocations to global and USD-denominated assets. The weaker pound amplified the GBP value of overseas holdings, an FX tailwind that EUR and USD investors did not experience to the same extent. 

Lastly, we are proud to release this peer group data, which will be published quarterly. We will be sharing more insights in the coming quarters. All contributors to this data will remain anonymous, and this is designed as a market intelligence tool rather than a research platform for managers.   

*Benchmark portfolio - a simple composite of global bond (hedged) and global equity investable index returns that mirrors the headline equity allocation of each risk profile. The weights between the two indices are 30:70, 50:50, and 70:30, respectively. 

N.b. All content is based on data at the time of writing on 02/12/25.