Q2 2026 Ready-Made Portfolio Returns: Which Portfolios Performed Best?

The war in Iran continued to unsettle global financial markets in the second quarter. The oil price remained high, prompting fears over inflationary pressures. Inflation continued to edge higher, leaving central banks weighing interest rate rises. The European Central Bank was the first to crack, lifting rates in June.

Nevertheless, stock markets were relatively resilient, buoyed by AI infrastructure spending, which continued at a blistering pace. Bond markets were more fragile, with yieldsThe return or profit on an investment, usually expressed as a percentage of the total price per year. For example, if the yield on a bond was 5%, this means an investor with £100 in that bond would get £5 in returns per year. rising (and prices falling) in expectation of higher interest rates. They came down a little at the end of the month, after a tentative ceasefire was agreed, though investors (rightly) remained nervous that a re-escalation was possible.

Against this backdrop, ready-made solutions performed well, with the average fund up 8.95%. This is notably better than the first quarter, when the average ready-made solution delivered just 1.4%. It puts the average ready-made solution up 16.9% over one year. While this is a little behind the 21.8% return for the MSCI World indexA global index that tracks large and medium-sized companies from 23 developed countries around the world. [1], most investors will be relieved, particularly give the complex political and economic backdrop.

Greater equity Value of an asset after subtracting liabilities.exposure was generally protective over the quarter. Higher risk funds, which tended to have more exposure to the apparently unstoppable AI trade, delivered an average of 13.25%. This was only just below the MSCI World return of 13.9% and, given that many funds will be naturally more diversifiedThe process of spreading your investment portfolio across different asset classes, such as partially in shares and partially in bonds, in order to reduce risk. than the major global indices, a strong performance.

However, it was a tougher month for some of the index heavyweights. Some of the technology giants started to struggle as investors reappraised their valuations in light of the vast capital spending programmes. Instead, it was the semiconductor giants that stood out – Broadcom, Micron and AMD in the US, plus TSMC and Samsung in Asia.

Bonds A type of asset that represents a loan, usually issued by a government, company or agency that wants to raise money to fund its operations.were a drag on performance. Yields rose over the quarter, which meant prices fell. Most bond portfolios were in negative territory. As a result, low risk portfolios delivered just 4.7% on average over the quarter, with fixed income exposure weighing on strong equity performance. The weakest funds – Barclays and Moneybox – both had equity allocations of 20% or below.

Medium risk portfolios delivered an average of 8.9% but had the broadest spread of returns – from 6.5% for the AJ Bell Balanced fund, to 11.7% for the Wealthify Ambitious fund. Scottish Widows stood out for achieving a relatively high performance – 9.1% - with the lowest equity weighting in the sector.

By the end of the quarter, the market pattern had changed again. Bond yields had started to fall, as the Strait of Hormuz reopened and oil prices dropped. The equity market had started to wobble over the strength or otherwise of the AI trade, while different parts of the equity market had started to revive – healthcare and financials for example.

With stock markets buoyant, it paid to have as much equity exposure as possible. The top performer over the quarter was Aviva Multi-Asset Plus 5, with a return of 14.9%. The fund is 100% allocated to equity and focused on Aviva Investor funds and selected external ETFsAn ETF (Exchange Traded Fund) is a fund made up of a number of assets which can be bought and sold on the stock market in the same way as you would with individual shares. ETFs can invest in everything from shares to bonds, commodities, currencies, property and even derivatives, as well as a mixture of any of these different assets. Think of it like an investment ‘playlist’ – an easy way to access a collection of things.. The fund is also the second-best performer over one year and third best over three years. Its largest holdings are the Aviva Investors North American Equity Core fund of funds and Invesco S&P 500An index that tracks the performance of the 500 largest publicly traded companies in the United States. It's often used as a benchmark for the overall global stock market. ETF. It has a 63% weighting to the US and 31% weighting to technology [2]. Other strategic allocations, such as 6% to Japan, 2.2% to South Korea and 2.6% to Taiwan served it well over the period. 

The Charles Stanley Multi-Asset Adventurous fund was the other strong performer. The fund has a much lower weight in US equities than some of its peers, at 38.7%, with a much higher weight in Asia Pacific ex Japan, at 12.4%. This will have been beneficial over the quarter as Asian markets delivered around double the returns of US markets. The group also has a high weighting in emerging markets, which supported performance.

This marks a turnaround after a difficult period for the fund. It remains the weakest performer over three and five years, but Abbas Owainati, Head of Portfolio Management and Asset Allocation at the group, took over as manager seven months ago and performance appears to be improving under his watch.

At the other end of the scale, the weakest performers were AJ Bell Adventurous, Barclays Adventurous and Vanguard LifeStrategy 100. The AJ Bell fund was a notable laggard, delivering just 9.4% - 2.7% behind its nearest rival. Nevertheless, the fund’s long-term performance remains strong and it is third in the high risk sector over five years. More recently, the fund may have been held back by its high UK weighting. It holds 22% in the UK. The MSCI United Kingdom was around 10% behind the MSCI World in the first quarter of the year [3]. 

The Barclays fund was held back by a relatively low weighting in equities. It had just 81% in equities over the period, 13% behind the sector average and the lowest of any high risk fund.

The LifeStrategy weakness is harder to unpick. It remains the strongest performer in the high risk segment over five years, and second over three years. It has 100% in equities, but the problem may have been its equity distribution. It had a relatively low weight in the US (45.7%) and Asia. Its only emerging market exposure is in Taiwan and Korea. It also has a high weighting in the UK (11.3%), which was an advantage last year, but has been more difficult this year [4].

There may have been winners and losers, but it has been an exceptional period for funds in the high risk category. Over one year, the weakest fund has delivered 22.45% and the strongest is up 26.85%. This puts them in line with the return from a MSCI World tracker.

Medium risk portfolios had the largest gap between the strongest and weakest portfolios over the quarter. There was 5.2% between the top and bottom performing funds. This disparity was partly explained by equity allocation. The top performing fund – Wealthify Ambitious – also had the highest equity allocation, at 70%. The average was just 61%.

The Wealthify fund rose 11.7%. It is now comfortably the top fund over one year, with a 20.98%, and 2nd over three and five years. The fund’s equity weighting includes property and infrastructure allocations. Its government bond exposure is mostly through the Vanguard US Government Bond index fund, which has a higher weighting in short duration bonds (56.8% of the portfolio is in 1-5 year maturities) [5]. These tend to be less interest rate sensitive and been less volatile this quarter.

The other stand-out performer over the quarter was the Barclays Growth fund, which rose 10.2%. It has a 63% weighting to the US, higher than many of its peers. It also had a reasonably high weighting (13%) to developed and emerging Asia. This meant it participated in the AI trade over the quarter. It also had relatively low weighting to weaker markets such as the UK (3%) [6]. It remains the top-performer among the medium risk segment over five years.

The weaker funds were not necessarily those with the lower equity weightings. Scottish Widows Managed Growth 4, for example, delivered a 9.1% return with an allocation of only 51% to equities. The weakest fund was AJ Bell’s Balanced fund, which rose just 6.5% over the quarter. Its longer-term performance is far better but this quarter it was in the wrong parts of the market, with a higher weight in the UK, relatively little emerging market exposure and a lower weight in the US.

Aviva Multi-Asset Plus II was another weaker fund. It also lags its peers over three and five years. Its low equity weighting – at 53% - is partly to blame. It has also held a relatively high cash weighting, at 5.5%. The fund has been more cautiously positioned recently.

We remain constructive on equities but expect a wider range of outcomes. We favour US, Japan and emerging markets, alongside selective exposure to European banks, defence and US energy.

On average, medium risk funds have delivered well for investors over the quarter, rising 8.9%, and are up 17% over the past 12 months. This is in spite of a relatively lacklustre return from bond investments over the period. Nevertheless, there remains a relative broad spread of outcomes within the sector, and a significant spread on equity allocation.

The low risk category revived in the March to June quarter after a lacklustre start to the year. Every solution in this category posted negative returns for the first three months of 2026 but bounced back with an average 4.7% return over the quarter. This was in spite of a continuing weak environment for bonds.

Funds in this sector have relatively low equity weightings – an average of just 25%. Government bond markets continued to be weighed down by fears over inflation for much of the quarter, as the Strait of Hormuz remained firmly shut and oil prices remained high as a result. It was only in June when a tentative ceasefire was agreed that bond yields started to come down and prices to recover.

The top performer in the low risk sector was the Wealthify Tentative fund, with a 6.8% return. It also had one of the highest equity weighting, at 30%. This helped performance, but the structure of its bond allocation was also important. It had a higher weighting in shorter-dated bonds, which are less sensitive to interest rates. On the equity allocation, the fund holds 11% in HSBC America, alongside weightings in Vanguard US, L&G S&P 500 Equal Weight, but it also holds 4% in HSBC Europe and around 5% in the UK.

The Charles Stanley Multi-Asset Cautious fund was also a top performer, rising 5.8% over the period. It had the highest equity weighting at 38%. The fund remains extremely small, at £5.4m, but its three and five year ranking has improved [7]. Its equity split is 12% in North American equities, 3% in European Equities, 3% in Japanese Equities and just 1.9% in UK equities. A 4.6% allocation to Asia ex Japan equities will have helped performance over the quarter. Like the Wealthify fund, it has had relatively high weightings in shorter-dated bonds, which has helped protect It against some of the volatility seen in bond markets.

At the other end, the Moneybox Cautious was the weakest performer over the quarter and has also had a difficult time over one and three years. Over this quarter, a higher weighting in cash, plus a 6% weighting in gold have weighed on performance [8]. Gold has been a strong performer over the past two years, but the price has weakened on the inflationary pressures created by the war in Iran.

The Vanguard LifeStrategy Fund 20 was another weak spot. It remains more than 10% behind the other low risk funds over five years and rose just 3.4% this quarter. The fund has been relatively highly weighted to both UK bonds and equities, both of which have been weak over the quarter.

It has been a difficult and unpredictable period in financial markets. Geopolitical disruption continues to weigh on investors, with little clarity on the outlook for inflation or the global economy. Markets continue to favour a US-focused, technology first allocation, but this may change if international tensions revive.