Pension and Financial Markets Performance Update: Q3 2025

Markets shifted direction in Q3 – and we’re pleased to say our funds caught the rebound. After a choppy first half of the year, the tide turned, and our investment managers positioned the portfolios to take full advantage.

In this update, we’ll walk through what drove markets in Q3, how BlackRock is positioning for the rest of 2025, and leave space for a look at how Penfold’s plans performed this quarter.

What Drove Markets in Q3?

The third quarter delivered a more positive tone across financial markets than many expected – especially given how volatile things felt earlier in the year. Here’s what stood out:

• Rate Cuts Sparked Optimism: The Federal Reserve’s first rate cut this year was a key turning point. The easing in U.S. borrowing costs revived investor appetite, benefitting both equity and bond markets.
• U.S. Growth Remained Resilient: Strong Q2 economic data bolstered confidence that the U.S. economy is holding up well. Earnings remained solid, and that pushed U.S. equities to outperform many of their developed market peers.
• Emerging Markets and Credit Outperformed: Emerging markets had a strong quarter – both equities and bonds rallied, buoyed by optimism around China’s reopening and stimulus, as well as downside pressure on the dollar. Credit markets, especially higher income bonds, also climbed as corporate fundamentals remained healthy.
• Gold and Alternatives Stayed in Focus: Gold continued to do its job as a diversifier. With geopolitical risk lingering and markets still somewhat uncertain, gold’s rally added value to portfolios.

The overall mood is optimistic – and BlackRock’s positioning helped deliver positive returns across the board.

How BlackRock Is Positioning Going Forward

BlackRock has laid out three thematic pillars that guide how the MyMap portfolios are structured over the next 6–12 months:

Theme 1: A Sunny Economic Horizon

BlackRock remains confident in global growth. Key indicators – like PMIs, corporate earnings, wage trends, and government stimulus – remain supportive. To capture this, the funds continue to hold elevated exposure to equities and high yield bonds.

Theme 2: Fundamentals Take the Helm

With policy uncertainty gradually clearing, performance is expected to be driven more by earnings and company strength than macro headlines.

Accordingly, BlackRock has increased allocations to U.S. equities (where corporate fundamentals remain strong) and Emerging Markets (where valuations remain attractive). At the same time, they’ve trimmed exposures in UK and European equities, arguing much of the earlier “catch-up trade” has already run.

Theme 3: Mind the Debt Iceberg

One risk they’re watching closely is government debt, especially in the U.S., which can weaken the role of bonds or the dollar during market stress.
To mitigate this, the funds are:

• Leaning into shorter‑dated bonds
• Reducing exposure to the U.S. dollar
• Adding more to “debt diversifiers” such as gold and emerging market debt

They believe these assets can help cushion the portfolio if credit or macro stress returns.

Spotlight on the Sharia Plan

The Sharia Plan, managed by HSBC, invests in a global mix of equities that meet Islamic finance principles – avoiding companies involved in things like alcohol, gambling, and conventional banking. That means it’s fully invested in shares, so it tends to experience more short-term ups and downs than mixed-asset plans.

In Q3, those ups outweighed the downs. US stocks, especially in the technology and communications sectors, powered ahead on the back of strong economic data and rising optimism around rate cuts. Big names like NVIDIA, Microsoft, and AMD were some of the fund’s top performers, helping push Islamic global equities higher.

Performance was slightly held back by weaker results in Europe and a few healthcare and industrial names – including Novo Nordisk and Samsung Electronics. But emerging markets such as China and Taiwan provided a welcome boost, with contributions from companies like Delta Electronics and Gold Fields.

Overall, the Sharia Plan benefited from a strong quarter for equities, especially in the US. HSBC continues to focus on high-quality, diversified companies with long-term growth potential, all while staying firmly aligned with Sharia values.

Penfold Plan Performance: Q3 2025

Here’s a look at how Penfold’s plans performed between July and September 2025.

Penfold Plan

• Protect: +3.9%
• Balance: +5.8%
• Growth: +7.6%

Standard Plan

• Risk Level 1: +3.3%
• Risk Level 2: +5.2%
• Risk Level 3: +6.5%
• Risk Level 4: +7.9%

Sustainable Plan

• Risk Level 1: +2.9%
• Risk Level 3: +5.8%
• Risk Level 5: +8.0%

Sharia Plan (Managed by HSBC):

• Risk Level 5: +11.9%

Past performance isn’t a guarantee of future returns. These figures exclude Penfold’s fees. As with all investments, your capital is at risk – and values can go down as well as up.

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 This Matters (and What You Should Do)

It’s tempting to get caught up in the headlines – but your pension is built for the long game. The patterns we saw in Q3 reinforce a few key lessons:

• Markets don’t move in straight lines. Rebounds tend to follow dips, and that’s where staying invested pays off.
• Diversification and active management work. BlackRock’s ability to reweight exposures (e.g. trimming Europe, adding EM, fortifying gold) helped capture upside while managing risk.
• Patience is your ally. Noise will always exist – but steady focus wins over knee‑jerk moves.

While we’re not offering financial advice and everyone’s situation is different, here are a few general principles that many long-term investors find helpful:

• Stay calm. Short-term volatility is normal.
• Stay invested. Don’t try to time the market.
• Stay informed. Use our app to track your pension.

Final Thought

Q3 2025 has reminded us that markets can turn – and when they do, being well positioned makes a difference. With BlackRock leaning into growth, fundamentals, and safer diversifiers, and with Penfold’s plans built for persistence, your pension is in capable hands.

Want to see how your plan’s doing? Open the Penfold app and take a look.