Private client portfolio performance remained strong in the third quarter of 2025, but sentiment towards bonds among chief investment officers worsened amid uncertainty over interest rates, according to ARC Research.

ARC Research’s latest data showed that the average return of the ARC Sterling Steady Growth Index, which is based on the most common risk profile run by discretionary investment managers, was estimated at 5.1 per cent in Q3.

This latest quarterly return figure brought the index’s year-to-date performance to 6.8 per cent.

The ARC Cautious Index returned 2.6 per cent in Q3, while the ARC Balanced Asset Index returned 4 per cent and ARC Equity Risk Index returned 6.2 per cent over the same period.

The findings coincided with ARC Research's latest survey of chief investment officers, which found that wealth managers were continuing to navigate an ‘uneasy’ balance of assets.

Bonds, which were once the strongest area of conviction, saw the sharpest fall in sentiment as optimism faded amid uncertainty about the path of interest rates.

Meanwhile, the outlook for equities remained broadly resilient, according to ARC Research, falling marginally from 12 months ago.

Sentiment towards alternatives improved in the quarter amid renewed support for gold and commodities, while cash was still viewed negatively, although the degree of pessimism has eased as some managers kept liquidity in reserve due to ongoing inflation uncertainty.

Commenting on the findings, ARC Research managing director, Dan Hurdley, said: “While equities remain in favour, under the surface sentiment towards the US has cooled from positive to neutral, reflecting concerns over valuations and policy risk.

“By contrast, Europe, Japan, the Far East and emerging markets are attracting stronger support as managers look for relative value and more attractively priced growth dynamics.”

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