Are you wiggy enough???

Talk about a disconnect between the high street and Wall Street.

On the one hand, there is a dismal backdrop politically and growing unease about what this Autumn Budget might hold. It’s almost inevitable that pensions will be in the firing line in some capacity and the Chancellor needs to raise more tax. Our personal finances are stretched.

On the other hand, the stock markets seem largely oblivious to the economic mood music and are roaring on, seemingly still powered by the same old theme of technology. But, if you look deeper, there’s another story in town, and plenty of reasons to ask yourself if you're properly diversified.

Europe has been a standout performer in 2025, with defence spending, good corporate earnings and lower interest rates fuelling growth. Banks like UniCredit, BBVA and Deutsche Bank are having a lovely time rolling around in Euros. And the Polish market is up about 30% so far this year.

Poland’s WIG

The main index in Poland is called the WIG20 – the Warszawski Indeks Giełdowy, since you ask. Try saying that after a few drinks.

Why? Foreign money is coming in, the labour market is strong, inflation is calm and banking, renewable energy and tech are doing well. It’s an emerging market which looks a bit like an advanced economy and investors can’t get enough pierogi.

Looking east, there are other powerful performance stories – South Korea and Vietnam are both up over 40% in 2025. Japan’s also having a moment.

Closer to home, the FTSE 100 is up around 10%. We’ve published a new piece this week with Schroders which reviews the outlook for the UK market, noting high yields but also the opportunity for outperformance in mid-sized companies too.

My key takeout? Compare all of this to the S&P 500, which has returned about 6% year to date, and you get the point. Large global passive funds and ETFs – increasingly popular as a cheap and easy way to access exposure to 1000+ global companies in one simple product – will typically have around 70% allocated to the US. Maybe that’s not such a good shout in 2025?

Diversification is as much about sectors as it is about regions – and we need to remember that tech isn’t the only game in town. Healthcare is a good example of a current Captain Unloved. Sometimes being uncool can be smart. I tell myself that every day.

From wigs to gaps

I’m speaking at the Labour Party Conference early next week (pass the popcorn!) on the continued enormous gender pensions gap in the UK. Thanks to Vanguard for tabling this issue and asking me to join them onstage to discuss.

How big is the issue? The difference between men’s investments and pensions and women’s (in the UK) is roughly the size of the entire GDP of Poland. Yes, you read that right. About £680 billion. This is a huge collective problem which is actually getting worse, not better.

There are many complex reasons why, but one thing we should be able to fix, which doesn’t involve asking anyone for more money, is to work harder to do a better job of communicating what risk actually means. And help people to make the right choices.

Women are more likely to pick lower risk options with pensions. Ask any provider and the data never tell a different story. Why? In part because of the unhelpful way in which this decision is presented to us and the way we make decisions. It’s like asking someone if they’d like to drink a vat of wodka whilst driving blindfolded up the M4. Would I like to take lots of risk with the money which is going to fund my retirement? Duh, no thanks!

But go back to the stock market returns above and then compare this to a chunk of money sitting in a cash account this year. And we can see that too many people – and disproportionately more women – are saying 'No thanks' to stock markets and missing out. When the truth is that there is no reason that anyone in their 30s and 40s, with money in a pension, should be doing anything other than picking the most ‘risky’ version of anything presented to them.

I’m not going to stand up next week and say that the way to solve a gap the size of the Polish GDP is to get everyone to save into the Warszawski Indeks Giełdowy. But maybe, just maybe, if we explained the returns as well as the risks, alongside core concepts of diversification and time which can act as a powerful body protector when the numbers flash red, we’d encourage more women to ‘risk up’ without feeling as though they’d just agreed to play blackjack with their future.

It won’t solve the whole problem. But it could make a bloody big dent in it! Na zdrowie!

Have a great weekend, everyone.

Holly