26/01/2026
2025 was a strong year for equity markets, but it wasn’t without challenges. Inflation concerns, government debt, geopolitics and the rapid rise of artificial intelligence all contributed to uncertainty. Yet despite this, markets continued to rise — particularly led by large US technology companies.
The so-called “Magnificent Seven” now account for more than a third of global stock market value. While their growth has supported returns, it has also increased concentration risk. SJP’s investment team has highlighted that as valuations rise, so too does the risk of over-reliance on a small group of stocks.
This backdrop made valuations increasingly important. Rather than following market weightings, SJP focused on areas offering better value, including the UK, Japan, Europe and emerging markets. Active allocation away from the most expensive parts of the US market contributed positively to performance.
Overall, SJP unit trusts delivered a weighted average return of 14% in 2025, net of fund charges — comfortably ahead of inflation and cash returns. Over three years to the end of 2025, the majority of SJP funds also outpaced inflation, despite a challenging period that included the highest inflation levels seen in decades.
Looking ahead to 2026, questions remain around whether enthusiasm for AI could turn into excess. While SJP does not currently see clear evidence of a bubble, market corrections are considered a normal part of investing. Falls of around 10% occur relatively frequently, and periods of uncertainty often create opportunity.
The message for investors remains consistent: stay diversified, remain disciplined and avoid reacting to short-term noise. Over the long term, it’s often those who stay invested through volatility who are best placed to benefit.
Past performance is not indicative of future performance. The value of investments may fall as well as rise, and you may get back less than invested.
Read more: https://partnership.sjp.co.uk/crownwealth/article/detail/sjpp/rising-through-the-noise
