Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA Mixed Investment 20-60% Shares sector.
There’s been something of a switch-around in the mixed investments fund categories. For years, the equity-heavy Mixed Investments 40-85% has attracted the bulk of investors’ cash (or shed the least). That followed outflows from those funds with higher bond exposures after bond valuations crashed as rates soared around 2022, and “bond proxy” mixed-assets exposures were unwinding as yields increased in the wake of those higher rates.
Mixed Investments 40-85% was the only mixed-assets game in town over the following three years. That has shifted. Over the 12 months to July 2026, Mixed Investment 20-60% Shares has taken £6.8bn, while its more equity-laden 40-85% sibling attracted just £843m, while 0-35% saw modest outflows.
These outflows themselves may be because managed portfolio services (MPS) are putting pressure on the traditional mixed investment fund, as the growth of the former over the past few years has been considerable. That said, MPS themselves often invest in mixed-assets funds, rather than completely supplant them.
Nevertheless, it seems that middle-of-the-road mixed investments are back in fashion. That’s probably not too surprising, given that the inhibiting factors in higher bond exposures are now well in the rear-view mirror.
Head to tail-winds
Alongside weaker headwinds, some tailwinds may be favouring the sector. The first is simply that the preponderance of mid-level scores when assessing clients’ risk tolerance. It could also be that investors are getting concerned at equity valuations, and the increasing role of AI-themed stocks in driving global equity returns. This is something that I mooted this time last year, as 40-85% flows began to wobble. But it remains speculation on my part, I confess.
What this change certainly is not driven by is performance, as the three sectors’ returns increase with equity exposure over one, three, and five years. Over these periods, and equity-heavy mixed-asset funds have generally performed better than bond-heavy ones.
Alongside this, we have seen a strengthening of the correlation between equities and bonds. That has weakened—though far from nullified—the benefits of diversification for mixed-assets funds. Equity-heavy exposures have performed better because equities outpaced bonds over the relevant periods, rather than this strengthening correlation benefitting equities in some way.
This strengthening of correlation has been driven by a variety of factors. This year, higher inflation expectations, elevated sovereign yields, geopolitical instability, and changing central-bank expectations affected both asset classes. A conventional balanced allocation consequently delivered less diversification than its historical average. The rolling 52-week correlation between equities and bonds rose by about +0.4 to +0.44, compared with a 10-year trend of about-0.2, according to FTSE Russell research (see here and here). While not a permanent situation, it’s hard to say how long this will persist.
Mixed investments funds are not restricted to equities and bonds, however—although they do make up the vast bulk of assets. This year commodities—one alternative—have offered valuable shock diversification, but the benefit depended heavily on timing and composition—commodities being a very broad field, from pig feed to precious metals. For example, energy exposure performed exceptionally during periods of the US/Iran war, but has been prone to sharp reversals as geopolitical expectations changed. Elsewhere, copper, lithium, and other energy-transition commodities had more structural support from alternative-energy demand.
Among listed alternatives, infrastructure has offered repeatable diversification, and also performed well during this March’s equity sell-off, triggered by the start of the war. Rolling correlations between infrastructure and equities were at their lowest levels since the FTSE Russell infrastructure index’s inception, according to research from the index provider.
That’s a lot to stay on top of, and frequently comes at a cost—more bells, more whistles, implying higher fees. Diversification is sometimes described as the only free lunch in investment, but one should nonetheless always read the T&Cs.
That said, the top-performing funds in the table below tend to be a straight split between equities and bonds, with only fund of funds TrinityBridge Managed Conservative having more than 10% invested in alternatives, and Orbis OEIC Global Cautious Fund Standard having a strategic exposure to commodities.
Table 1: Top-Performing Mixed Investment 20-60% Shares Funds Over Three Years (with a minimum five-year history)
All data as of July 31, 2026; Calculations in GBP
Source: LSEG Lipper
This was first published on p30 of the September edition on Moneyfacts.
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The views expressed are the views of the author and not necessarily those of LSEG Lipper. This material is provided as market commentary and for educational purposes only and does not constitute investment research or advice. LSEG Lipper cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. Please consult with a qualified professional for financial advice.
