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Our market summary
Global stock markets fell 2.4% in October as concerns about spending on artificial intelligence (AI) weighed on technology companies. Emerging markets struggled, while UK equities proved more resilient. Investors favoured defensive sectors and government bonds as caution increased.
Performance review
In October, returns for the Cirilium Passive Portfolios ranged from a gain of 0.3% for the Conservative Passive Portfolio to a loss of 2.7% for the Adventurous Passive Portfolio, with equities dragging on returns. Emerging market equities was the worst performing asset class as investors questioned whether the historic investment in AI infrastructure would generate returns. The US only experienced a modest selloff but the relative calm at index level masked volatility underneath as AI related stocks fell and investors rotated into more defensive sectors like consumer staples. The oil price and energy stocks both rose on expectations of an escalation of the Iran conflict after the US midterms, boosting the fortunes of the UK market. The lower-risk portfolios enjoyed a tailwind from our fixed income holdings as government bonds reversed most of September’s selloff, while our alternatives holdings neither added nor detracted.
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Portfolio activity
Our portfolio activity was limited to managing cashflows and rebalancing following market moves.
Cumulative returns over periods shown to 31 October 2026
| YTD | 1 year |
3 years |
5 years |
Since launch | |
| Cirilium Conservative Passive | 2.5 | 2.7 | 23.8 | 13.2 | 67.0 |
| IA Mixed 0-35% | 2.8 | 3.0 | 23.8 | 11.1 | 55.1 |
| Cirilium Balanced Passive | 4.6 | 4.6 | 33.0 | 22.4 | 116.2 |
| IA Mixed 20-60% | 5.1 | 5.4 | 32.4 | 20.2 | 85.8 |
| Cirilium Moderate Passive | 7.2 | 7.3 | 44.7 | 38.3 | 173.4 |
| IA Mixed 40-85% | 7.6 | 7.5 | 41.8 | 29.2 | 138.5 |
| Cirilium Dynamic Passive | 9.5 | 9.5 | 55.5 | 54.1 | 233.2 |
| IA Flexible | 7.5 | 7.3 | 42.1 | 30.0 | 143.3 |
| Cirilium Adventurous Passive | 10.7 | 10.7 | 66.3 | 66.8 | 174.5 |
| IA Flexible | 7.5 | 7.3 | 42.1 | 30.0 | 71.9 |
Discrete annual returns over periods shown to 31 October
| 2026 | 2025 | 2024 | 2023 | 2022 | |
| Cirilium Conservative Passive | 2.7 | 8.8 | 10.8 | 2.3 | -10.5 |
| IA Mixed 0-35% | 3.0 | 8.1 | 11.2 | 0.9 | -11.1 |
| Cirilium Balanced Passive | 4.6 | 11.6 | 14.0 | 2.9 | -10.6 |
| IA Mixed 20-60% | 5.4 | 10.6 | 13.6 | 1.7 | -10.7 |
| Cirilium Moderate Passive | 7.3 | 14.9 | 17.3 | 4.5 | -8.5 |
| IA Mixed 40-85% | 7.5 | 13.1 | 16.7 | 2.0 | -10.6 |
| Cirilium Dynamic Passive | 9.5 | 18.0 | 20.3 | 6.0 | -6.5 |
| IA Flexible | 7.3 | 14.0 | 16.1 | 1.8 | -10.1 |
| Cirilium Adventurous Passive | 10.7 | 20.1 | 25.0 | 6.2 | -5.6 |
| IA Flexible | 7.3 | 14.0 | 16.1 | 1.8 | -10.1 |
The performance figures shown refer to past performance. Past performance is not a reliable indicator of future performance.
Source: Quilter and Morningstar as at 30 October 2026. Total return, percentage growth, net of fees of the R (GBP) accumulation shares over periods shown. The Cirilium Conservative Passive Portfolio, the Cirilium Balanced Passive Portfolio, the Cirilium Moderate Passive Portfolio, and the Cirilium Dynamic Portfolio launched on 8 February 2013, and the Cirilium Adventurous Portfolio launched on 1 June 2017.
Investment outlook
As we move through the final quarter of the year, markets are sending mixed signals amid ongoing geopolitical uncertainty and inflationary concerns centred around petrol prices and related energy shortages. Government spending and persistent deficits have been in focus on both sides of the Atlantic, while the US midterm elections are likely to be more noisy than genuinely relevant for the equity markets, where we expect AI build-out to remain the centre of attention.
Government bond markets showing signs of distress…
Government bond yields rose sharply last quarter, primarily as a consequence of better-than-expected growth but also driven by concerns around the inability of governments to control budgets. Bonds look attractive as a long-term buy but as central banks are in rate hiking mode it is likely a little early to be jumping in with both feet. We will wait until it becomes clearer that yields have peaked.
…while equities remain focused on AI
Interest-rate sensitive parts of the equity market (such as utilities and small caps) have struggled, but overall, the large-cap technology companies have reasserted their dominance. Interestingly, their strong recent earnings and relatively muted price performance has meant that valuations have receded somewhat from their highs late last year. One concerning aspect is poor market breadth, with only a few companies driving markets near all-time highs – this warrants watching closely.
Continued earnings growth will likely be critical
We are moving into a ’show me‘ phase of AI, with investors starting to probe whether continued extravagant spending will result in future revenue and earnings growth. This earnings season has been another exceptionally strong one, but we get the sense that earnings growth rates have peaked for this cycle. The risk is that this could lead to a souring in investor sentiment as sky high expectations come back down to earth. The sustainability of these supernormal profits now becomes an important question the market must grapple with.
Approver: Quilter November 2026
QIP 24372/29/19660
