Throughout the weekly updates of 2025, we set out a consistent investment philosophy centred on diversification by asset class, geography, and strategy. This approach reflected growing US policy uncertainty as the outlook for US economic and trade policy under President Trump became less predictable. At the same time, pressure on long-established institutions such as the US Federal Reserve and the trade courts increasingly challenged the long-standing narrative of US exceptionalism. Against this backdrop, US equity markets remained historically concentrated and highly valued, reinforcing the case for a broader opportunity set.
We also sought to position the portfolios for a world moving away from the low-inflation, low-interest-rate conditions that have defined much of the previous decade. Persistent inflation pressures, rising term premia, elevated fiscal deficits, and heavy sovereign issuance have contributed to a more complex macroeconomic environment and reduced the scope for central banks to provide easy policy support.
As we begin 2026, there are grounds for cautious optimism alongside continued realism. Whilst the pace of policy surprises may moderate, the underlying forces shaping markets – including fiscal constraints, geopolitical fragmentation and greater dispersion of returns – remain firmly in place. In this environment, we believe a disciplined and diversified approach, combined with selective exposure to long-term structural growth themes and a continued focus on risk-adjusted outcomes, remains well suited to navigating the year ahead. Our emphasis therefore remains on portfolio resilience, flexibility and consistency as the investment landscape continues to evolve.
