2025 was a strange year. Despite the expenses of moving home (and now in 2026 renovating the flat I’ve purchased), I finished the year in a stronger financial position than at the start.
Yet I feel somewhat
unnerved by the scale of some portfolio successes, and troubled by what the next
few months and years might bring.
For context, key indices in 2025 returned:
FTSE 100 +21.7%;
FTSE Small Cap ex investment trusts +11.9%;
FTSE Aim All
Share +9.8%
US S&P
500 +16.4%
MSCI World +21.6%
MSCI Emerging
Markets +34.4%
Personal Portfolio Detractors
One of my
biggest investment mistakes has been an investment in the internet infrastructure
company Digital 9. So poor has it been (now barely five pence in the pound
initially invested) that I’ve written it off to zero. As a certificated holding
costly to sell, it may be better to hold on for whatever crumbs remain on
wind-up.
An inherited
certificated holding in Mobico, the former National Express coach and bus
company, is also tending inexorably towards zero.
A further
inheritance from my late parents’ portfolio, the drinks company Diageo may be
an intriguing recovery opportunity. In free fall since touching nearly £40 in
late 2021, to below £16 four years later, Diageo has started to appear among
the holdings of ‘value’ fund managers, e.g. Ranmore Global Equity fund. The former
Tesco chief executive, Dave Lewis, has recently joined Diageo, so there may
well be developments…
Portfolio Disappointment
A small
initial holding in Artemis UK Future Leaders (AFL) established in spring 2025 when
the former Invesco Perpetual UK Smaller Companies investment trust changed
managers after protracted poor performance has so far failed to fire.
As of 9th
January 2026, the trust languishes on a 12% discount, albeit in the previous
couple of days the share price rose out of the £3.70s where it had been stuck for
some time.
Key
contributors
2025 was the
year of commodities and value investment.
A
long-standing holding in the Zimbabwean gold miner Caledonia (CMCL) as well as
relatively small initial positions in Pan African Resources (PAF) and Thor Explorations (THX) proved highly geared to the sharp increase in the price of gold.
So rapid was
their ascent (three to four-fold within nine months) that towards year end what
I hope will prove to be judicious top-slicing has left me with capital to deploy
in my ISA in search of dividend paying opportunities.
In the speculative portion of my SIPP, as well as the ‘casino’ portion of my non-ISA, small stakes in Mkango Resources (MKA) and a revisit of East Star Resources (EST) have thus far proved well-merited.
Commodity-focused companies on the cusp of bringing scarce resources towards production is the thesis here.
Strong
performance came from a range of value-tilted funds: Temple Bar (TMPL), Man Income,
Ranmore Global Equity, Artemis Global Income, and UK focused investment trusts Onward Opportunities (ONWD) and Lowland (LWI) investment trusts.
2026: on the
radar
1. To fuel
the dividend engine of my ISA I am currently pondering CMC Markets (CMCX) - to benefit
from ongoing market volatility - perhaps a greater weighting to UK cyclicals
geared to consumerism and housing (e.g. Dunelm?); for funds I may top up Artemis
Global Income, initialise into River Global Growth and Income, and for emerging market income add to Pacific
North of South Emerging Equity Income Opportunities.
2. For the
growth portion of general investment account, and my SIPP, what I’ve dubbed my
2042 personal care portfolio for when I turn 75, and in which I can take a very
long-term view:
I want to
combine small caps and value by either adding to, or initiating into:
- River and
Mercantile UK Micro Cap RMMC (strong recent performance after acute pain in 2022,
still on a wide discount, and a perform by 2028 or wind-up tender in play)
- Heptagon
Global All Cap (perhaps the deepest value and most idiosyncratic global value portfolio
available).
- Mirabaud
Discovery Europe Ex-UK (for exposure to Nordic and Swiss smaller companies).
- Matthews
China Discovery (Chinese smaller companies fund, where Tiffany Hsiao has
returned after several years, having produced extraordinary performance during
her previous tenure in 2018-2020).
Whatever I decide in 2026 and beyond, I will keep in mind some characteristically wise words of Howard Marks in his December 9th 2025 memo Is it a Bubble?.
Marks refers to AI, but the point applies to all investment:
"Since no
one can say definitively whether this is a bubble, I’d advise that no one
should go all-in without acknowledging that they face the risk of ruin if
things go badly. But by the same token, no one should stay all-out and risk
missing out on one of the great technological steps forward. A moderate position, applied
with selectivity and prudence, seems like the best approach (…)
Intelligent
investment in data centers, and thus in AI – like everything else –
requires sober, insightful judgment and skilful implementation. "
