UK investors are increasingly favouring active strategies, seeking control and flexibility amid market volatility, according to the second edition of the Portfolio Panorama report from Janus Henderson’s Portfolio Construction and Strategy (PCS) team.
The data highlights that UK investors are gradually rebuilding risk exposure amid a shifting market backdrop. On average, portfolios have maintained their multi-asset and equity allocations while decreasing allocations to fixed income strategies as interest rate volatility persists.
After maintaining a steady allocation to alternatives for 12 months, UK investors have again shifted more capital into the asset class. As of August 2025, the average portfolio was allocated 57.0% to equities, 33.5% to fixed income, 3.7% to alternatives, and 5.8% to multi-asset strategies.
The Portfolio Panorama report analyses trends across 1,958 UK portfolios from March 2024 to August 2025. It focuses on aggregated data from UK portfolios over two distinct six-month intervals: the ‘Previous Period’ (September 2024 – February 2025) and the ‘Current Period’ (March 2025 – August 2025).
Equities: Investors maintain equity exposure, staying overweight mid-caps and domestic equities while shying away from US tech giants.
Despite global diversification opportunities, UK investors remain firmly focused on domestic equities, underscoring a persistent home bias.
Technology represented 19% of total equity allocations in the Current Period, compared with 26% in the global benchmark (MSCI ACWI). While Technology remained the most favoured sector, UK investors increased their exposure to Industrials and Financials, reflecting a tilt toward cyclical over growth sectors amidst broader market volatility.
Allocations across market caps remained stable, with a continued overweight to mid and small caps versus global equities, and a slight reduction in large caps, indicating a consistent tilt away from mega-cap concentration.
Fixed income: Exceptional bond market volatility has pushed investors to focus on income, shorter duration, and active strategies.
UK investors favoured high short-end yields, seeking income over duration risk in a volatile interest-rate environment. Average portfolio duration decreased by 0.35 years between the Previous and Current Periods, reflecting caution despite expectations of central bank easing.
UK investors’ portfolios are diverging from global benchmark norms, with cash and corporate bonds taking centre stage over government securities. Average government bond exposure of the portfolios surveyed stood at 39%, well below the 54% weighting in the Global Aggregate Bond Index.
Implementation: UK investors are embracing active management while maintaining cost discipline.
Active allocations increased across equity and fixed income, rising by three percentage points in the Current Period, as investors prioritised flexibility and risk control.
Exposure to passive strategies continued to decline, particularly in fixed income, reflecting a broader shift in conviction and risk appetite.
Portfolio fees remained broadly flat at 41 bps, suggesting that cost efficiency is being maintained even as implementation styles evolve in response to market conditions.
Matthew Bullock, Head of Portfolio Construction and Strategy, EMEA & APAC, at Janus Henderson, said:
“UK investors are increasingly favouring active strategies as they look for greater control and flexibility in volatile markets. We are seeing a clear rotation into domestic equities and mid-caps, as well as a shift toward short-term yields. These shifts suggest that clients want to remain nimble while still capturing opportunity.
“The retreat from long-duration bonds reflects ongoing caution about rate risk, even as central banks pivot toward easing. At the same time, the increased appetite for alternatives demonstrates a desire to diversify and balance portfolios against ongoing uncertainty. What stands out most is that investors are willing to pay for selectivity and adaptability without letting costs spiral. This highlights a renewed conviction in active management — not just as a tactical response to volatility, but as a strategic choice that better positions portfolios for the long term.”
