By Fahad Kamal, CIO

• The market reaction

Strikes against Iran have caused market volatility, with oil prices rising and gold gaining.

• Setting the situation in context

Markets tend to recover from geopolitical crises. We see volatility as a feature of investing, not a prompt to act.

• Our investment convictions

Diversification, including gold positions, aims to provide resilience. Our investment decisions remain based on fundamentals, not headlines.

On Saturday 28 February, the United States and Israeli forces launched coordinated military strikes against Iran, with President Trump confirming that “major combat operations” were underway.

As with all conflicts, our thoughts are with all those affected.

Financial markets are volatile and attempting to price a rapidly evolving situation across a range of financial assets.

US equity futures are modestly lower, oil prices have risen sharply — reflecting the roughly 20% of global supply that transits the Strait of Hormuz — and gold, the classic ‘safe haven’, is up.

These moves are notable, but not disorderly.

The value of investments, and the income from them, can fall as well as rise and you may not get back what you put in. Past performance should not be taken as a guide to future performance. You should continue to hold cash for your short-term needs. This email should not be taken as advice.

It is important not to let the gravity of geopolitical events distort our investment judgement.

As we wrote in a recent CIO Weekly, “geopolitical upheaval can come at a very heavy price for the individuals and populations involved. However, in modern history, geopolitical flashpoints have rarely had a lasting impact on financial markets.”

Since 1956, we have identified 42 major geopolitical flashpoints. Despite the immediate uncertainty each one created, US equity markets have, on average, posted positive returns of +5.4% in the six months following the event.

Last year’s ‘Liberation Day’ in the US also provided a timely reminder of market’s ability to recover from surprise news, in this case from a very different source. US equities fell almost 20% between February and April 2025 before recovering to end the year 18% higher than January 1st. Volatility, however alarming in the moment, is a feature of investing — not a signal to act.

Our portfolios are built for moments like this. Diversification across asset classes, regions, and sectors provides resilience when any single shock dominates the headlines.

Our Anchor and Cycle investment process aims to harvest attractive risk premia while leaning into favourable economic growth and earnings fundamentals. This, coupled with scenario analysis, ensures we do not make knee-jerk responses to events, however significant they appear in the moment. 

We continue to observe and plan. Our deliberate addition of gold earlier this year alongside broader diversification, is working as intended in a time of market volatility.

Our investment convictions have not changed, but we are monitoring developments closely — particularly anything that could have a lasting impact on energy supply, inflation, or global growth. We will keep you informed should that assessment change.