Annual report 2024

The last few weeks have been a rollercoaster of escalation, volatility and relief. While this may be a permanent feature of the present era, it shouldn’t be thought of purely in the context of one man. The war with Iran and the closure of the Strait of Hormuz have had a profound impact on the price of oil, inflation and the bond markets. Equity markets have shown remarkable resilience and are already near all-time highs. While peace negotiations are ongoing, the market think

1. Trump blockade and failed talks - long lasting effects The US and Iran have failed to close a deal regarding the re-opening of the Strait of Hormuz. In response, Trump has announced a naval blockade of the Strait, with an intention of intercepting vessels heading to or from Iranian ports and clearing mines laid in the waterway. By doing this, Trump has threatened to cut off Iran's oil exports and end its practice of charging ships a toll to pass, stripping Tehran of the ec

Fahad Hassan, CIO Executive summary US-Israel-Iran conflict has effectively closed the Strait of Hormuz, oil and gas prices are higher. Portfolios had already been defensively positioned — gilts exited, duration cut, UK mid-caps and European small caps removed — all of which have since fallen sharply. Macro The last month has seen a reset of inflation expectations, as the US and Israel entered a conflict with Iran. The Strait of Hormuz, a narrow body of water responsible for

Fahad Hassan, CIO The last few weeks have seen a reset of inflation expectations, as the US and Israel entered a conflict with Iran. The Strait of Hormuz, a narrow body of water responsible for 20% of the world’s seaborne oil supply, is effectively closed. Oil prices are materially higher and could go much higher still. Natural gas, a key input into fertiliser production, has seen a large jump in price, which in turn is causing an increase in food prices. Like in 2022, gove

It is impossible to second guess the next move in markets given the underlying complexity of the war in Iran. Particularly given the impact that President Trump’s comments are having on markets. What is becoming increasingly apparent is that even with a swift resolution to the conflict, the disruption from the war will result in inflated energy costs for some time.