Balanced ETF portfolios GBP Q1 2022 commentary

SaxoSelect Commentaries
Asset classes Stocks (developed and emerging equity), bonds, non-traditional
Instruments ETFs
Investment style Macro, diversified investment focus
Quarterly return (net of fees) 
Defensive -2.81% 
Moderate -3.37%

Market overview 

The first quarter of the year was a volatile one for financial markets. Russia’s invasion of Ukraine, the resulting exacerbated energy shock and rate hikes across many global central banks added significantly to investor uncertainty over the period. Supply-driven inflation and commodity prices surged following the sanctioning of Russia, with risk assets falling sharply before rebounding. Emerging markets were also weighed down by a new round of Omicron cases and broader geopolitical tensions. Developed market equities and emerging market counterparts declined steeply in a classic risk-off move over the period. Developed market equities (MSCI World Index) were down 5.53 percent, while emerging market equities (MSCI Emerging Markets Index) were down 14.7 percent over the quarter. Most global bond indices experienced a volatile period and finished the quarter down as rates continued to advance amidst upward trending inflation. 

On the policy front, the US Federal Reserve (Fed) raised interest rates by 0.25 percent, in line with market expectations, with further rate hikes expected to rapidly reduce the size of the Fed’s balance sheet. Markets have priced in a further six increases for the remainder of the year, given record inflationary readings. Russia’s invasion of Ukraine has placed additional strain on food and energy prices, with inflation accelerating. The US labour market remained resilient over the period with the unemployment rate falling to 3.8 percent and average hourly earnings growing by 0.5 percent in February.

Within the European block annual inflation grew to an all-time high of 7.5 percent in March, driven by high food and energy prices; this was a significant increase from February. Following a €12 billion debt raising for its COVID-19 recovery fund, the European Union discussed the possibility of issuing bonds to finance energy and defence spending to alleviate sharply rising energy costs.

Sterling weakened against the US dollar from $1.35 to $1.31, while it was broadly flat versus the euro at €1.19. The dollar generally strengthened against major world currencies in Q1 2022, driven by a more risk-off tone to markets and by greatly heightened increases in expectations for interest rates in the US.

Major commodities, including energy and industrial materials, gained over the quarter. Gold prices rose meaningfully over the period on a flight to safety, alongside strong price rises for crude oil.

Portfolio performance

Returns net of feesDefensiveModerateAggressive
Since inception (Oct 2015)28.87% 50.51%61.18%

All models posted negative returns over Q1 2022, with mixed performance of the equity sleeve. There was a contribution to performance from UK equities, which have held up very resiliently in the market turmoil in Q1 2022, whereas exposure to European, US and emerging market equity all dragged on performance. It was also a poor quarter for several fixed-income markets, with yields rising aggressively over the quarter. As such, exposure to mid- and long-dated treasuries and gilts detracted from performance, as did exposure to USD-denominated emerging market debt. The portfolio continues to benefit from a higher exposure to inflation-linked bonds compared to solely nominal bonds. Gold was a contributor across all profiles. 

Portfolio allocation (as of 29th March 2022) 


Saxo Markets provides personal portfolio management via its SaxoSelect service. Before entering any managed portfolio, we must first take into account your investment objectives, goals and financial situation. 

This material should be considered as a marketing communication under the Financial Conduct Authority’s rules. Saxo Capital Markets UK Limited (SCML) undertakes reasonable efforts to ensure that any information published in this communication is reliable. SCML makes no representation or warranty, and assumes no liability, for the accuracy or completeness of any information contained in this communication. 

Investing in financial products always involves risk. As a general rule, you should only invest in financial products if you understand the risks associated with them. Investing in a portfolio with currency that differs from the base currency of your account carries the risk of exposure to changes in the rate of exchange between them. See the full Managed Portfolio Disclaimer for more information. Past performance is not a guide to future performance.

SaxoSelect Balanced Portfolios are offered by Saxo Bank. BlackRock’s data which is utilised by Saxo Bank in building the SaxoSelect Balanced Portfolios is based upon certain internal assumptions and BlackRock has not considered the suitability of the content of its data against individual needs and risk tolerances for all investors. As such, BlackRock’s data is for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. BlackRock’s data has not been prepared in accordance with the legal requirement designed to promote the independence of investment data and is not subject to any prohibition on dealing ahead of the dissemination of the data provided to Saxo Bank and, as such, is considered to be a marketing communication to Saxo Bank. 

iShares and BlackRock are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock is not affiliated with Saxo Bank. BlackRock makes no representations or warranties regarding the advisability of investing in any product, portfolio or service offered by Saxo Bank or any of its affiliates. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of any product, portfolio or service offered by Saxo Bank or any of its affiliates nor does BlackRock have any obligation or liability to any client or customer of Saxo Bank.


Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.