Positioning portfolios for long‑term growth during periods of volatility

The first few months of 2026 have shown just how quickly markets can change direction. After a steady start to the year, rising tensions in the Middle East pushed oil and energy prices higher, leading to some of the biggest daily moves we’ve seen in decades. It’s understandable that this has made investors pause and question what it means for their long‑term plans.

What’s been driving markets?

Right now, the biggest influence is the situation in the Middle East. Concerns about possible disruption to oil supply has driven extreme volatility in energy markets, with Brent crude recording its second‑largest weekly increase since the Gulf War in 1990, alongside the widest daily nominal trading range on record – from $83.66 to $119.50 per barrel – since Bloomberg’s intra‑day data began in the 1980s.

These moves also spilled over into other areas of the market, including technology and credit, as investors reassessed the broader economic impact.

This comes on top of a busy period already, with mixed signals from AI‑related stocks, shifting views on global growth and changing central bank expectations.

What does this mean for you as an investor?

Periods like this can feel uncomfortable, especially when geopolitical events are involved. But short‑term swings in oil prices or sentiment rarely change long‑term outcomes.

A few things are worth keeping in mind:

• Energy markets are naturally volatile – sharp moves are not unusual.
• Long‑term returns come from broad economic growth, not short bursts of market noise.
• Diversified portfolios are built to cope with shocks in any one area.

Our portfolios are designed precisely for moments like this. While certain parts may be affected by energy prices, others – such as global equities, bonds and real assets – behave differently. This helps keep the overall journey smoother.

How we’re positioned today

We have taken steps to make portfolios balanced and less dependent on any single region or theme and are optimistic by the breadth of opportunities and range of return drivers available.

• Europe, where valuations are still reasonable and long‑term spending on infrastructure and energy transition supports growth.
• Japan, where meaningful corporate reforms, stronger consumption and more shareholder‑friendly policies are improving outcomes.
• Emerging and frontier markets, such as South Korea, Taiwan and Vietnam, which benefit from younger populations, rising incomes and shifting supply chains.
• The US remains a key long‑term driver of returns, supported by strong earnings growth, resilient margins and robust balance sheets. That said, we have been broadening exposure to help manage concentration and valuation risks.

These regions often respond differently when energy markets move, helping keep portfolios resilient.

Managing US concentration

While we still believe strongly in the US, we balance traditional S&P 500 exposure with equal‑weight strategies to reduce reliance on just a handful of mega‑cap companies – particularly useful given recent swings in AI‑sensitive stocks.

Where bonds fit in

Fixed income remains a useful stabiliser. With central banks now moving at different speeds, we prefer a flexible approach that allows managers to adapt as conditions change. We also like shorter‑dated, income‑focused bonds and selective emerging‑market debt, which provide diversification and attractive yields.

Have we made changes because of the Middle East situation?

We’re monitoring developments closely, but we haven’t made significant changes specifically in response to the recent volatility because we are comfortable with our current positioning. Geopolitical events tend to create short bursts of uncertainty rather than long‑lasting shifts and we are always planning for the long-term.

Instead, we’re looking for opportunities where market moves have pushed high‑quality assets to more attractive entry points. Volatility can be uncomfortable, but it often creates value for patient investors.

Our message going forward

The world is uncertain, and markets will continue to react to headlines – sometimes dramatically. But this is exactly why diversification matters.

Our portfolios are built to spread risk, capture long‑term opportunities across the globe and remain resilient through periods of stress. While we can’t predict every twist and turn, we can make sure you are not reliant on any one market, sector or theme.

The best approach remains simple: stay diversified, stay invested and stay focused on your long‑term goals.