May-25: Insights

​Read the latest Avastra Fund insights on Markets, Equities, Bonds and Alternatives for May 2025.

MAY 2025 UPDATE

​​For UK professional investors only ​

MARKETS

Technology sector led the equity rally driven by tariff truce and strong quarterly earnings.
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Temporary US-China tariff relief lifted sentiment, but fresh threats toward the EU reignited uncertainty.

Anticipated tax cuts and deregulation offer support, but questions around fiscal discipline and debt sustainability remain.

EQUITIES

The VT Avastra Global Equity Fund returned 4.92% for the month and 0.28% YTD.
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• Regional positioning sees an increase in Global allocations funded from a reduction in Japanese markets as Japanese bond yields soar.
• Sector switches include moving from World Comm. Services to World Health Care as valuations seem attractive.
• Factor switches include moving from World Small Cap to Momentum, and from S&P 500 Equal weight to newly launched VanEck World Equal Weight ETF.
• Manager changes include selling out from Berkshire Hathaway, in favour of the Downing Active Defined Returns fund and moving cash to Ultrashort Bonds.
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The fund provides a “4-in-1” active allocation strategy across Regional, Sector, Factor and Manager strategies.

BONDS

​The VT Avastra Global Fixed Income Fund returned -0.10% for the month and -1.08% YTD.
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• Switching from USD ultrashort allocations to GBP ultrashort allocations to mediate fund currency exposures.
  
  

The fund provides an active allocation approach to managing duration and credit quality exposure within the Bond sector.

ALTERNATIVES

The VT Avastra Global Alternatives Fund returned 1.07% for the month and +2.88% YTD.
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• Reducing allocations from Listed Private Equity and US Ultrashort Treasuries, in favour of Downing Active Defined Returns fund as well as GBP Ultrashort Income.
  
  

The fund provides both asset-based and risk-based diversification, as an alternative to equities and bonds.