With volatility back on the agenda and global markets full of surprises in 2025, Brooks Macdonald’s Investment Director, Mark Shields, speaks with Wealth DFM Magazine’s Deputy Editor Jenny Hunter, to share why his team is taking a cautious but flexible approach. From sitting neutral on the US and overweight in the UK, to exploring alternatives and short-dated bonds, he explains how advisers can think about positioning portfolios as we head towards 2026, and why patience and diversification still matter most.
Markets have been volatile and full of surprises in 2025, but what does that mean for portfolios? Jenny Hunter, Deputy Editor at Wealth DFM Magazine, caught up with Mark to find out how his team is positioning their MPS portfolios, where they see opportunities, and what advisers should be thinking about for the future.
Mark has been with Brooks Macdonald since 2007, and he’s worked on the MPS portfolios and multi-asset funds since about 2011, almost since they were first launched. These days, he also sits on the Asset Allocation Committee, heads up thematic research and sits on the UK funds research team. So yes, he is very experienced and very busy!
JH: In light of the uncertain and volatile market conditions experienced this year, what actions have you taken within the MPS portfolios to help mitigate ongoing risks?
Mark: We’ve taken a more neutral stance on equities. After the rally we saw following April’s lows, we decided it was sensible to take some risk off the table, particularly in areas that looked most exposed to a US-centric recession.
We sold out of our US smaller companies positions and rotated into alternatives, short-dated sovereign bonds, and an equal-weighted S&P 500 tracker. That last piece is important; we didn’t want to abandon the US completely, but we did want to reduce the concentration and valuation risk from the Magnificent Seven stocks that have been driving markets.
Those seven names in the Magnificent Seven now make up more than 35% of the S&P 500 and around a quarter of the MSCI World Index. That’s a huge amount of concentration risk.
JH: What would encourage you to increase your weighting again in the US in the future?
Mark: Some of these companies in the US are priced for perfection, or very close to it, and if the market starts to question their AI spending or growth assumptions, we could see a sharp unwind. We had a small taste of that earlier in the year. We think the risk is high enough to justify diversifying away from such a concentrated part of the market.
Those seven names in the Magnificent Seven now make up more than 35% of the S&P 500
So, we’d need to see either a meaningful pullback in US markets or some resolution of the risks that are out there. At the moment, we’re happy applying more caution. It feels like the right thing to do when there’s just too much uncertainty. And of course, with Trump in the mix, you never quite know what’s coming next.
JH: If you’re dialling back on the US, which regions and sectors are currently offering the most compelling investment opportunities?
Mark: The UK is a big focus for us. There are some fantastic companies here that are being overlooked by both domestic and global allocators, which creates some attractive valuations. We’ve got an overweight position in UK equities, and while the UK market overall has lagged the US, our stock picking has delivered strong results and, in some cases, has outperformed global markets.
Europe also has some interesting opportunities, but the UK is where we see the most potential right now and with a lower risk profile compared to a concentrated US tech bet.
JH: Given the size of the deficits in the UK and the US, is there a risk that markets may begin to take greater notice? If so, how has this influenced your fixed income and duration exposure?
Mark: We saw a bit of movement in the bond markets quite recently as investors started to focus on the fiscal situation again. Trump’s “big, beautiful bill” will add trillions to the US deficit over the next decade, which is mind-boggling.
Earlier this year, US Treasury yields actually fell after the bill was passed, which didn’t make much sense to us, but now we’re seeing longer-term yields rising again, which we think is the market finally pricing in more risk.
Our approach has been to stick to the shorter end of the curve. Our weighted average duration is around 4 1⁄2 years versus 7–8 for the benchmark. We’re still getting a good yield but with less capital volatility than you’d see in long-dated bonds.
JH: What are you watching out for as we head into 2026?
Mark: We’re broadly comfortable with our positioning, but we’re keeping a close eye on a few things. Tech remains one of our key themes, but we’re reviewing how concentrated we want that exposure to be.
We’re also looking at alternatives and are continuing to work with external fund providers to create new products where we see gaps in the market which may find their way into MPS portfolios in future.
Our stock picking has delivered strong results and, in some cases, has outperformed global markets
If yields rise further, we may look at selectively adding to fixed income. And if we get a 5–10% sell-off in US equities, that might be an opportunistic time to reduce our underweight. It’s about staying flexible and ready to act when the market gives us the chance.
Conclusion
As Mark explains, this is a market that rewards patience and diversification. For advisers, the takeaway is clear: don’t get caught chasing concentrated growth stories, keep an eye on overlooked opportunities in the UK and Europe, and remember that sometimes treading carefully is the smartest move of all.
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About Mark Shields
Mark joined Brooks Macdonald in 2007 and co-manages the Managed Portfolio Service and Multi-Asset Fund range.
Prior to joining Brooks Macdonald, Mark worked at Private Equity Intelligence for a year. He has around 18 years’ experience in financial services.
Mark is a Chartered Member of the Chartered Institute for Securities & Investment (Chartered MCSI) and holds the Investment Management Certificate (IMC).
