St. James’s Place (SJP) has made a series of targeted portfolio adjustments as it enters 2026, aimed at strengthening diversification, improving risk-adjusted returns and maintaining resilience in a late-cycle market environment.
At the start of the year, SJP’s investment team introduced an allocation to Emerging Market Debt (EMD) across portfolios. While the team’s overall stance on EMD remains neutral, it represents a structurally underrepresented segment of global government bond markets and provides valuable diversification benefits to a portfolio.
It has also reduced exposure to higher-risk credit assets in developed markets, where spreads have become increasingly tight, and reallocated towards UK equities and government bonds. These areas offer stronger fundamentals and more attractive compensation for risk, supporting portfolio stability while maintaining return potential.
These changes have been implemented across fund-of-fund ranges including Polaris 1 and 2, Polaris Multi-Index 1 and 2 and the three InRetirement funds.
SJP’s market outlook for equities and fixed income
Hamish Gibberd, multi-asset portfolio manager at St. James’s Place, said: “US equities remain supported by solid earnings, but high valuations and a narrow concentration in technology leave the market more vulnerable to setbacks. By contrast, despite multiple expansions over 2025, the UK continues to trade at a substantial relative discount.. Despite muted macro sentiment, earnings quality is stable, IPO activity is improving, and companies are returning more capital to shareholders. European equities (ex UK) are also attractively priced in the global market, offering balanced exposure to value and growth, supported by steady profitability.
“Japan remains one of our most compelling opportunities. Valuations are appealing, corporate reforms are accelerating, and profitability trends are strong. Smaller Japanese companies, in particular, continue to trade at significant discounts to large caps. Their strong balance sheets, rising dividends and accelerating buybacks offer both diversification and attractive return potential.
“Emerging market equities also remain an active overweight. They continue to offer some of the strongest five-year expected returns globally, supported by favourable valuations and diversification benefits relative to US-dominated developed market indices.
“Fixed income once again offers meaningfully positive real income. Falling policy rates, supportive yields and tighter credit spreads have contributed to strong returns. Whilst government bonds now offer an important cushion, investor’s need to be selective in corporate credit, where spreads are tight and compensation for risk varies by sector.”
Commenting on SJP’s latest asset allocation changes, Robin Ellis, director of multi-asset portfolio management at St. James’s Place, said: “Late-cycle environments demand discipline. Our recent portfolio changes reflect a deliberate focus on valuations, diversification and resilience rather than chasing returns. By trimming areas where risks are poorly compensated and reallocating towards assets with stronger fundamentals, we believe portfolios are better positioned to navigate uncertainty while remaining focused on long-term outcomes for clients.”
“Overall, these changes reinforce SJP’s focus on disciplined portfolio construction. By adjusting exposures across equities and fixed income while maintaining broad diversification, the investment team aims to ensure portfolios remain well balanced, resilient and positioned to navigate a range of market outcomes as 2026 unfolds.”
