Wise Multi-Asset Income

The United States remained the central focus. Revised GDP data confirmed the economy had grown faster earlier in the year than first reported, helped by resilient consumer spending. However, this strength is increasingly reliant on higher-income households benefitting from stock market gains, while broader consumer confidence weakened. Labour market indicators softened, with September’s employment report disappointing and previous figures revised sharply lower, pointing to a less robust jobs market than previously thought. Inflation pressures persisted, with tariffs pushing prices higher and the Fed’s preferred gauge remaining above its 2% target. Balancing weaker employment data against sticky inflation, the Fed cut interest rates by 0.25% to 4.0–4.25%, its first move lower this year. The widely expected decision gave further support to equities and strengthened expectations of additional cuts ahead. Bond markets responded to changes in monetary policy. Shorter-dated yields (more directly impacted by interest rate expectations) fell on the back of the Fed’s rate cut and expectations of additional easing, while longer-dated yields (a function of longer-term inflation, growth and government spending expectations) also drifted lower. Somewhat counter-intuitively, gold simultaneously rose to record highs as investors sought to protect themselves against long-term uncertainties (high debt levels, persistent inflation risks, and a more volatile political environment) that bond markets appeared to downplay. On the last day of the month, the inability of Congress to agree a budget triggered the first U.S. government shutdown in seven years.

In Europe, the outlook remained weak. Activity indicators continued to soften, while inflation stayed above target. The European Central Bank left interest rates unchanged for the second consecutive meeting, and markets now assume the easing cycle has run its course. Political instability added to the noise, with yet another change of Prime Minister in France highlighting the challenges of governing without a majority. Even so, European equities gained, supported by resilient earnings, optimism around U.S. growth, and expectations of lower U.S. interest rates. The UK also faced difficulties. Growth remained sluggish while inflation was higher than in most other advanced economies. The Bank of England kept rates at 4%, with investors cutting back expectations for rate cuts through to mid-2026. Attention turned to the Labour Party conference, where speculation of a potential leadership challenge to Keir Starmer unsettled sentiment. A shift toward more expansive government spending could weigh heavily on the UK’s fiscal credibility, a key concern given already high deficits and sensitivity in the government bond market. With the Autumn Budget due in November, markets will be focused on whether fiscal discipline can be maintained. UK equities gained modestly but underperformed global peers, while gilt yields were steady. Elsewhere, China remained under pressure. Industrial activity contracted for the sixth consecutive month, reflecting weak demand and ongoing stress in the property sector despite repeated stimulus measures. Chinese equities rose but lagged other Asian markets. Japan, by contrast, delivered strong equity performance, supported by corporate reforms and steady foreign investor inflows. Elsewhere, emerging markets benefited from a softer U.S. dollar, which eased financial conditions and supported capital flows.

Commodities also performed strongly in September. Gold surged to record highs on safe-haven demand. Copper strengthened as well, with supply disruptions at major mines, including Freeport-McMoRan’s Grasberg operation, limiting output at a time of structurally strong demand from electrification and renewable infrastructure. Oil was more subdued as investors worried that OPEC+ might add supply into a market already showing signs of excess.

Against this backdrop, the IFSL Wise Multi-Asset Income Fund rose 2.1%, ahead of the IA Mixed Investment 40–85% sector, which gained 1.9%. The fund benefitted from strong performance across resources, infrastructure, biotechnology, and a broad range of equity strategies. Resources were a clear highlight. BlackRock World Mining and BlackRock Energy & Resources delivered strong gains, helped by discount narrowing and commodity price strength. Infrastructure also performed well. International Public Partnerships reported solid interim results, with Net Asset Value (NAV) growth supported by buybacks, disposals, and robust dividend cover. Its commitment to projects, such as the Sizewell C nuclear facility, underscored the long-term growth potential of the trust. Pantheon Infrastructure was another strong contributor, with interim results showing NAV gains, portfolio revaluations, and a new investment commitment. Inclusion as a constituent in the FTSE 250 Index and a dividend increase further underpinned confidence. HICL Infrastructure also advanced, supported by stable operations and reliable income. Biotechnology was another bright spot. International Biotechnology Trust rose strongly, helped by a wave of high-profile M&A (mergers and acquisitions). Roche acquired 89Bio at an 80% premium to the prevailing share price, Pfizer agreed to buy Metsera at up to a 110% premium, and Genmab announced a deal for Merus at a 41% premium. All three were held in the portfolio, crystallising value. At the same time, uniQure delivered highly positive trial results in Huntington’s disease, which drove its shares sharply higher. These developments highlighted two themes long central to the trust: breakthrough innovation and large pharmaceutical companies using acquisitions to replenish pipelines as patents expire. Equity fund holdings also contributed positively, reflecting broad-based market strength. Accordingly, Man GLG Income, Fidelity Special Values, Middlefield Canadian Income, Schroder EM Value, and Aberdeen Asian Income all delivered strong gains over the month. The weaker areas of performance were UK property and financials, where stubborn inflation, slow growth, and political uncertainty weighed on sentiment.

Over the month, we took some profits in our holding in Blackrock World Mining following strong performance. We added to HICL Infrastructure and International Public Partnerships given the persistently wide discounts, attractive valuations and reduced sensitivity to UK economic growth. We increased our holding in the Odyssean Investment trust, a fund with a concentrated exposure to undervalued UK mid-sized companies where there is an opportunity to unlock value via strategic, operational or managerial improvements. The sector exposure is tilted towards technology and industrials with a weighting towards overseas rather than domestically generated revenues. We also topped up the Renewables Infrastructure Group, Bluefield Solar, Workspace and Helical on weakness.