UK equities outperformed the FTSE All Share. Relative gains were driven by favourable stock selection, with investments in communication services, technology and consumer staples (such as food and household goods) adding the most value.
Within the US equity portfolio, positive stock selection in industrials, IT and financials was outweighed by negative selection in healthcare, materials and communication services.
Stock selection within emerging markets had mixed results. Negative investment performance in the materials, technology, communication services and consumer staples sectors partially offset by positive selections in the consumer discretionary and real estate sectors. On a country basis, investments in Russia, China, Brazil and India all had a negative impact on returns.
In Japan, a trend towards lower risk investments and falling bond yields lead to an outperformance of cheaper, defensive stocks (those providing more stable returns). The reduced investment in real estate and zero investment in utilities detracted from the performance over the year.