Pension and Financial Markets Performance Update: Q2 2025

After a turbulent start to the year, global markets settled into a more stable (if still eventful) rhythm in the second quarter of 2025. Stocks bounced, bonds held steady, and central banks inched closer to cutting rates. Through it all, Penfold’s plans were resilient – thanks to the smart, steady hands managing your pension investments.

In this update, we’ll walk through what happened in Q2, how BlackRock and HSBC (who manage the MyMap funds behind Penfold’s core plans) responded, and what they’re focusing on for the rest of the year.

What’s Going On in Markets?

The global economy is still in solid shape – but that doesn’t mean smooth sailing. Here's what stood out in Q2:

• The U.S. economy showed some signs of slowing, but overall global activity in services and manufacturing stayed strong.
• Governments are spending again, not just in the U.S., but across Europe too. That’s supporting growth.
• Markets are expecting more interest rate cuts later this year, as inflation cools and wage growth steadies.
• Geopolitical uncertainty and U.S. policy shifts continue to rattle nerves, especially in equity markets.

Despite all this noise, the overall mood is cautiously optimistic – and the team at BlackRock is adjusting the MyMap funds to make the most of that.

How BlackRock Is Positioning Your Pension

BlackRock’s investment strategy is built around three key themes for the second half of 2025:

1. A Robust Economic Backdrop

The global economy is holding up well. Jobs are plentiful, factories and service businesses are humming, and government stimulus is helping. So BlackRock is leaning into:

• Global shares (equities), which tend to rise when the economy is healthy.
• Property investments, which may benefit if falling mortgage rates give the housing market a boost.
• Emerging market bonds, which offer access to faster-growing regions outside the U.S. and Europe – without taking on too much extra risk.

2. Elevated Market Volatility

Political shifts, trade tensions, and a slower growth outlook mean markets could remain choppy in the short term. BlackRock has taken some defensive steps:

• Diversified U.S. equity exposure, moving away from just the largest (and priciest) companies.
• Added UK shares, where they see good value and less hype.
• Held firm on gold, which continues to shine as a reliable stabiliser – and has been one of their best-performing calls so far this year.

3. Interest Rates Could Fall

• With inflation easing, central banks may have more room to cut interest rates. That’s changing the risk–reward balance between cash, bonds and stocks. BlackRock’s response?
• More short-dated bonds, especially in lower-risk plans. These offer attractive income without taking on too much duration risk.
• Less cash, as its returns become less appealing when rates fall.
• Cautious optimism, avoiding long-term government debt where borrowing remains high.

Spotlight on the Sharia Plan

The Sharia Plan invests in a fund managed by HSBC that follows Islamic principles. It avoids companies involved in industries like alcohol, gambling, or conventional finance, and is made up entirely of shares (equities).

Because it’s 100% invested in shares, the plan is more exposed to short-term ups and downs. But in Q2, markets broadly bounced back – and the Sharia Plan was able to benefit. Global stocks rose, with strong performances from U.S. tech giants like NVIDIA, Microsoft, and Meta. Asian markets – especially South Korea and Taiwan – also did well, helped by easing trade tensions and growing excitement around new technology themes.

While a few companies, like Tesla and Mastercard, held back returns slightly, overall the fund finished the quarter in line with its benchmark. HSBC continues to look for long-term opportunities in global growth sectors – always staying true to Sharia principles.

Penfold Plan Performance: Q2 2025

Here’s a look at how Penfold’s plans performed between April and June 2025. These long-term, globally diversified plans are designed to handle bumps like these.

Penfold Plan

• Protect: +3.8%
• Balance: +5.5%
• Growth: +7.2%

Standard Plan

• Risk Level 1: +2.7%
• Risk Level 2: +4.2%
• Risk Level 3: +5.6%
• Risk Level 4: +6.7%

Sustainable Plan

• Risk Level 1: +2.8%
• Risk Level 3: +5.8%
• Risk Level 5: +7.6%

Sharia Plan (Managed by HSBC):

• Risk Level 5: +5.8%

Past performance isn’t a guarantee of future returns. But it’s a reminder of why staying invested, and staying diversified, can help weather short-term storms.

Penfold fund performance vs. benchmarks

When evaluating how well a fund is performing, it can be useful to compare it against a benchmark – an industry standard or reference point. For instance, if your fund achieves a return of 8% and the benchmark return is 6%, it’s outperforming by 2%.

The following chart shows how Penfold’s fund performance compares to a benchmark of CPI inflation + performance percentage in the period 1 April 2025 to 30 June 2025:

Why Long-Term Investing Works

If there’s one message we’ll keep repeating, it’s this: trying to time the market is tough (even for the pros). But staying invested – through the ups, the downs, and everything in between – is one of the most reliable ways to grow your pension over time.

Your Penfold plan is built for exactly that: long-term, sustainable growth, managed by professionals who know how to weather the storm without losing sight of the bigger picture.

So what should you do? Markets move. Your pension doesn’t have to..

• Stay calm during the headlines.
• Stay invested for the long haul.
• Stay in the loop with the Penfold app.

Final Thought

From shifting U.S. policies to rising UK opportunities, Q2 reminded us that resilience is key. With BlackRock and HSBC adapting to what’s next and Penfold plans designed for long-term strength, your pension is in good hands.