Performance update

October was another strong month for investors, driven mostly by equities. Positive third quarter earnings, combined with growing expectations for lower interest rates, helped propel U.S. equities to record highs. As a result, the global stock market index (MSCI All Country World) rose by 4.3% in euro terms for the month. The U.S. government shut down and subsequent absence of economic data releases contributed to a quieter environment for defensive bond allocations, which returned 0.5% on a currency hedged basis.

Portfolio returns for October ranged from 1.2% for Cautious Growth to 3.2% for Equity Growth. Year to date, Cautious Growth returned 4.9%, Moderate Growth 6.2%, Long Term Growth 7.2% and Equity Growth 5.8%.

Performance vs ARC

One month following each quarter-end, we receive industry performance data from Asset Risk Consultants (‘ARC’). Their Private Client Indices (‘PCI’) serve as objective benchmarks, reflecting actual, net-of-fee, performance data provided by investment managers across Europe. The indices are segmented by risk category, enabling meaningful comparisons within similar risk profiles.

Relative to peers in the ARC Indices, our portfolios have delivered strong outperformance in 2025. Encouragingly, this trend extends to longer time horizons, as shown in the table below. Shaded figures highlight not only outperformance versus the ARC Index but also instances where returns placed us in the top quartile of managers.

Returns for the Moderate Growth and Long Term Growth GPS funds were similarly top quartile over all time periods. Cautious Growth GPS was slightly outside the top quartile year to date and over 5 years.

Figure 1: Euro Portfolio Returns vs the ARC PCI

Source: Davy & ARC www.suggestus.com as at 30 Sep 2025.

Performance is net of all 3rd party fees and an assumed Davy fee of 1.23% including VAT, accrued monthly.

Portfolio Commentary

Our tactical equity calls—positions taken with high conviction over shorter time horizons—have been positive contributors to performance this year. While the U.S. stock market has rebounded strongly from the ‘Liberation Day’ sell-off, it has been outpaced in euro terms by the China A-shares, European, and Latin American (LatAm) markets, where we have established tactical positions. The LatAm allocation was initiated in May and increased in September.

Our currency-hedged equity exposure gave back some returns in October, as the U.S. dollar appreciated by 1.7% versus the euro. However, we had proactively reduced the size of this position in the prior month, mitigating the impact.

One tactical position that has not performed as expected is our allocation to the S&P 500 Equal Weight Index. We anticipated a healthier balance between the returns of the largest U.S. stocks and the broader market—either through a cooling-off of the ‘Magnificent Seven’ or a catch-up from the rest. That broadening of returns has not materialised, and the equal-weight index has underperformed the market-cap weighted index by 10% in U.S. dollar terms year-to-date.

This dynamic has also created a challenging environment for our active equity managers, who allocate capital based on conviction in individual companies rather than their index weight. The narrow leadership in U.S. equities has made it more difficult for conviction-based strategies to outperform.

Alternative assets continued to perform well in October, once again fulfilling their role as effective portfolio diversifiers relative to bonds. Liquid absolute return managers delivered an aggregate return of 1.7%, while gold—despite a sharp mid-month decline — rose by 7.0% (figures in euro terms).

The price of gold (+53% in US dollars) is now on track for its largest calendar-year gain in nearly 50 years. In portfolios we own a 4% position in gold, established between November 2021 and May 2022. This was a strategic response to the transition away from a low-interest rate environment and the implications that shift would have on the role of bonds as diversifiers. Since then, the price has more than doubled, allowing us to take profits and rebalance the position on two occasions, as illustrated in Figure 2.

Figure 2: Rebalancing gold allocations

Source: Bloomberg, as at 31 Oct 2025. Figures are in US dollars.

Portfolio changes

Towards the end of the month, the Investment Committee approved the removal of the Vanguard US Opportunities fund from portfolios.

The fund, managed by Los Angeles-based Primecap, has a notable small- and mid-cap bias and exhibits a negative quality tilt. This is partly due to its underweight exposure to the ‘Magnificent Seven’—which rank highly on quality metrics—but also reflects allocations to companies that score poorly on quality characteristics. This tilt has become more pronounced in recent years and is increasingly inconsistent with our preferred quality bias within equity allocations.

Vanguard US Opportunities has been held in models since late 2012, delivering an annualised return of 16.4%, compared to 15.1% for the S&P 500 to the end of October 2025. While shorter-term performance has varied due to Primecap’s high active share, maintaining exposure over the full period has added value—particularly notable given the challenging environment for active management in U.S. equities.

In recent years, performance has been challenged given Primecap’s structural underweight to large-cap stocks. Year-to-date, it has outperformed the S&P 500 by 10%, primarily driven by its bias toward lower-quality names. However, this characteristic is a key reason behind the decision to exit the position, as outlined above.

Units held in the fund will be reallocated to passive U.S. equity exposure.

Figure 3: Vanguard US Opportunities vs the S&P 500 Index