24 Jul 2026

Investment Update: Market commentary Q2 2026

Markets have rallied but it still pays to stay balanced

After a cautious start to the year, markets found firmer footing in the second quarter. Inflation concerns eased, conflict in the Middle East calmed and oil prices moved lower as the Strait of Hormuz opened. That shift helped improve investor sentiment and support growth within global markets.

Asian stock markets, which had been particularly affected by the earlier rise in oil prices, were one of the areas to benefit most as conditions improved. More broadly, investors returned to focusing on growth, with technology and artificial intelligence continuing to play a major role in driving market returns.

Why we are not getting carried away

While recent performance has been encouraging, we do not think this is a moment to become complacent. Markets remain sensitive and a large share of recent gains has come from a relatively small group of technology companies, many linked to the growth of AI.

That concentration matters. When market returns rely heavily on a handful of businesses or themes, portfolios can become more vulnerable to sudden changes. We have already seen markets question whether the level of spending on AI will translate into real returns, which has led to more focus on companies that support the AI supply chain, such as chip manufacturers. Dealing with this level of concentration, risk will be a challenge going forward.

What this means for portfolios

Our approach remains focused on diversification, risk management and high-quality active management. Although inflationary pressures appear to have eased for now, the risk has not disappeared completely. We remain mindful of wider economic factors, including energy prices, interest rates and geopolitical events, all of which would have a meaningful impact on global markets.

That is why our portfolios continue to be positioned with a balance of opportunities and protection in mind. Areas such as commodities and infrastructure can still play a useful role, alongside exposure to long-term growth opportunities.

The value of staying disciplined

For clients, the key message is that stronger markets are welcome but they do not remove the need for a disciplined investment approach. A well-diversified portfolio, managed by experienced investment professionals, is designed to help clients remain comfortable through both calmer and more unusual market conditions.

In short, the mood has improved since the start of the year but the uncertainty remains. We continue to believe that active management, high levels of diversification and careful risk control are the right foundations for navigating whatever markets do next.

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