WealthSelect Sustainable Active quarterly commentary - Review of Q3 2026

How our global multi-thematic equity holdings performed

A challenging shift in markets 

While equity markets delivered a positive return over the period, it was broadly a challenging period for holdings within the global multi-thematic theme, particularly in September where the market rotated back to focus on US large-cap growth companies.

Technology provides a tailwind

Against this backdrop, the Mirova Global Sustainable Equity Fund outperformed global equity markets, delivering a return of 1.9%. The CT Sustainable Opportunities Global Equity Fund also delivered a positive return, although it lagged on a relative basis. The fund performance in both cases was supported by their exposure to information technology.

How our environmental equity holdings performed

Rising yields weigh on timber

Over the quarter, rising bond yields were a headwind to the performance of the timber theme in the portfolios. Higher bond yields resulted in higher mortgage rates in the US which weighed on sentiment for the housing related exposure of the theme. Against this backdrop, the Quilter Investors Timber Equity Fund (managed by Pictet) fell by 4.4%.

Clean energy feels the impact of rising yields

Rising bond yields were also a headwind to the performance of our energy transition theme, where they weighed on valuations of companies with earnings profiles that are longer duration. This impacted the performance of Schroder Global Alternative Energy and Pictet Clean Energy Transition. Despite this, the Pictet fund remains the best-performing fund year to date, up 25.5%, while underlying earnings and structural tailwinds remain supportive for the theme more generally. 

How our social equity holdings performed

A positive quarter for social themes

Our social equity exposure was a bright spot during the period, with both the Impax Global Social Leaders and Candriam Oncology funds outperforming global equities. Impax benefited as the market took a more considered view of companies previously seen as potential ‘AI losers’, while Candriam benefited from a strong recovery in biotech.

How our fixed-income holdings performed

Inflation concerns unsettle bond markets

It was a challenging period for fixed income, as concerns about inflation and strong economic activity, particularly in the US and Europe, pushed bond yields higher and prices lower. Developed market central banks responded by raising interest rates. In the US, markets are pricing in around three further rate rises, suggesting the US Federal Reserve may need to take more aggressive action to bring inflation back towards target. European bond markets also faced uncertainty around fiscal pressures in France. Against this backdrop, both government and corporate bonds fell.

How our alternatives holdings performed

Volatility creates opportunities 

The alternatives allocation delivered a small positive return and helped diversify the portfolio during a challenging period for fixed income markets. The Ardea Global Alpha Fund was the strongest performer, taking advantage of volatility in bond markets to identify attractive relative-value opportunities.