Monday Club – 27/07/26: Your weekly Wealthwise digest

Investment round-up

Global dividends up 10.1% year-on-year

Global dividends rose to $424.5bn (£318.4bn) in the first quarter of 2026, up 10.1% year-on-year, according to the first Janus Henderson Global Dividend and Buyback index. North America, Europe, Japan and the UK were all strong, despite a “noisy” macroeconomic backdrop characterised by higher-for-longer interest rates, trade uncertainty and geopolitical risk. Share buybacks softened over the period, meanwhile, falling 3.1%.

SJP appoints Acadian on Worldwide Income unit trust

St James’s Place has appointed Acadian Asset Management as its investment adviser on the Worldwide Income unit trust, replacing Ninety One. The group explained its plan is to move to a more diversified investment approach, reduce ongoing charges and strengthen the fund’s long-term investment outcomes.

Jupiter sees H1 revenues jump 39%

Jupiter continued its turnaround efforts in the six months to 30 June, with revenues increasing 39% to £213.3m. Pre-tax profit increased 67% to £50.7m over the period while the firm’s assets under management rose by 36% to £73.7bn on the back of its acquisition of CCLA, an ethically focused investment firm.

River UK Micro Cap loses portfolio manager

The River UK Micro Cap trust has announced that portfolio manager George Ensor has resigned. Ensor will continue to manage the company’s portfolio while arrangements are made for a suitable successor but the board says it is “actively assessing a number of options to ensure an orderly and sustainable transition that is in the best interests of shareholders”.

Vanguard reduces OCF on popular ETF

Vanguard is set to reduce the ongoing charges figure on its popular FTSE All-World UCITS ETF by five basis points – from 0.19% to 0.14%. The firm has estimated the reduction will save investors in the fund around $37m annually.

AJ Bell AUA up 12% over Q2

2026 Assets under administration for the AJ Bell platform rose 12% to £121.5bn over the three months to 30 June 2026. Gross inflows in the quarter stood at £6bn – up 50% on 2025’s £4bn – while net inflows in the quarter were £3bn, up 43% on the previous year. The platform had total advised customers of 191,000 – up 6% in the last year and 1% in the quarter.

William Blair appoints Khanna as manager

William Blair Investment Management has appointed Chandan Khanna as co-portfolio manager of its newly launched Global Leaders Select strategy. The fund invests in a concentrated portfolio of 25 to 35 global companies combining both quality and growth characteristics.

In focus: Attention deficits

The UK 10-year gilt yield tipped back over 5.1% last week – although, for those inclined immediately to blame the new prime minister, it is instructive to consider what is happening globally. Longer-dated bond yields have started to climb across the world, as fixed income investors respond to the resumption of hostilities in Iran and domestic political inaction on deficits.

Bond markets have moved a long way – and quickly too – particularly at the longer end of the yield curve. The yield on the 10-year treasury, for example, has risen from 4.5% at the start of the month to 4.7% while the 10-year bund yield is up from 2.9% to 3.2%. For their part, Japanese 10-year bond yields are up from 2.7% to 2.8% while France, long seen as more fragile, has seen its 10-year bond yield rise from 3.6% to above 4%. In this context, the recent hike in UK 10-year bond yields from 4.8% to north of 5.1% seems less of an outlier.

Investors worldwide have certainly got the jitters, with Reuters reporting some $7.1bn (£5.3bn) pulled from US investment-grade bond funds and exchange-traded funds in the seven days to 22 July alone, in response to rising treasury yields. That is the largest weekly withdrawal on record.

Guilhem Savry, head of equity and fixed income strategy at Edmond de Rothschild, points to two main drivers behind this trend. “One is a rebound in the inflation premium, as oil prices have risen by 3% over the month, due to renewed tensions between the US and Iran, increasing uncertainty regarding the normalisation of the Strait of Hormuz,” he says. “The other is the credibility of fiscal policies, particularly in Europe, as projections for government deficits are deteriorating compared with expectations of stabilisation or reductions made at the beginning of the year.”

Arguably, it would be better for investors if rising bond yields were simply about inflation as this would mean the problems could be resolved relatively quickly should the US and Iran resume their tortuous negotiations. Equally, it is by no means assured that higher oil prices will feed through into higher inflation. This is a different world to 2022, with weaker economic growth and tighter labour markets.

Savry points out, however, that the inflation premium only partially explains the current pressure on government bond yields, adding: “We estimate that only 30% of the total increase stems from the adjustment in inflation expectations.” This has been evident from bond yields – in March, the 10-year treasury note was below 4%. Even during the ceasefire in June, however, it did not come close to that level – bottoming out at 4.4%.

This suggests the real problem is increasingly the credibility of governments. “Projections for government deficits are deteriorating compared with expectations of stabilisation or reduction made at the beginning of the year,” explains Savry.

“This deterioration is occurring against a backdrop characterised by, one, political instability – as illustrated by the resignation of the British prime minister and the narrow majorities held by the governments in France, Germany and Italy – and, two, weak growth, affected by rising oil prices and uncertainty surrounding trade.”

Governments have, in general, been hopeless at managing their deficits. France has failed to tackle its ludicrously generous pensions system, the UK has made no progress on welfare reform and Donald Trump’s ‘One Big Beautiful Bill’ Act could cut an estimated $4.46tn in tax revenue over a 10-year period. The problem might perhaps be reframed as: Until bond markets protest more loudly, governments do not have the right incentives.

Another problem may be that the US central bank has backed off from offering detailed guidance on its plans. This makes signals harder to interpret, says James Bilson, global unconstrained fixed income strategist at Schroders, adding: “Kevin Warsh becoming Fed chair adds another layer of uncertainty.

“He is less supportive of giving markets firm guidance about future interest-rate moves and appears to prefer letting markets respond more freely to the economic data. For investors, that means there may be less certainty about what the Fed will do next.”

This should give the Britain’s incoming prime minister and chancellor pause for thought. If bond markets are tiring of supporting governments that will not tackle excess spending, the UK could be among the first in the firing line. As such, observes David Zahn, head of European fixed income at Franklin Templeton, the new government needs to make its intentions clear as soon as possible.

“The longer uncertainty persists around fiscal policy, the more cautious markets are likely to become,” he explains. “Investors have already experienced an extended period of uncertainty over tax and spending plans, so providing clarity sooner rather than later would help reduce that uncertainty and allow markets to assess the government’s priorities on their merits.

“Beyond the headline fiscal rules, bond investors will ultimately be looking at the UK’s overall debt trajectory and whether policy supports sustainable economic growth without embedding higher inflation. Those are the factors that will determine confidence over the coming months, rather than the market reaction to any single political announcement.”

Nor is it just the UK where professional investors are treading increasingly carefully on government debt – for example, Orbis Global Cautious fund manager Mark Dunley-Owen says he and his colleagues are now wary of traditional developed market government bonds, notably the US, Europe and Japan as well as the UK. “The safe-haven status of these bonds reflects past perception rather than today’s fundamentals and, in our view, current prices do not adequately reflect their rising risk profile,” he adds.

“We see inflationary pressures building on both the supply and demand sides of the global economy. On the supply side, the consequences of protectionist policies such as tariffs, re-industrialisation and the Iran War are contributing to higher input costs and overall prices. On the demand side, the substantial AI capital spending is also contributing to inflationary pressures. We expect these dynamics will keep inflation and bond yields elevated and put downward pressure on bond prices.”

For investors, it is a difficult moment. Most bond funds are in negative territory since the start of the year and have failed to provide any sort of ballast to volatile equity markets. Bonds are supposed to be the boring, low-volatility part of an investor’s portfolio – instead they have proved an unwelcome source of excitement.