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Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Hello and welcome to our latest portfolio update. We have been on quite a ride in 2026, and despite a torrent of political developments, and almost continuous news-flow, most markets are higher now than they were at the start of the year. The portfolios have successfully captured these strong returns. But now we must ask the question: where are things going from here, and how can we position to benefit from developments going forward?

There are three key themes that we expect to drive markets over the next 6 - 12 months. It is around these three trends that we are currently positioning portfolios.¹

The first theme remains unchanged, it is ‘navigating some risks’. Markets have been choppy this year, and we have responded with agility. All in all, we remain reasonably optimistic: the global economy is on firm footing, companies keep beating profit expectations, and government spending is supportive.² That said, it’s not all good news, the outlook for the US/Iran conflict remains uncertain, while the war in Ukraine continues to generate uncertainty.

Bringing this all together, we retain a positive view on stocks, although not quite as positive as last quarter. We had taken the market sell-off in March as an opportunity to buy into stocks. Since then, there has been a strong rebound, and so at the end of June we took some profit from our holding. Additionally, we maintain several positions to steady portfolios against geopolitics. Most notably Gold given its ability to support portfolios during periods of uncertainty. And we are cautious on the dollar, which could come under pressure given the changeable direction of US foreign policy.

The second theme is: beyond artificial intelligence. The AI trade has powered markets forward over the past couple of years, and while we continue to see it as an attractive investment theme, we are starting to ask: what comes next? More specifically, what will the second order effects of the AI boom be, and how can we position portfolios to benefit from those?

To this end, we see two key areas for further investment. The first being the AI supply chain, in particular hardware such as semi-conductors. To that end, we are tilting towards emerging market stocks, which have significant exposure to companies deeply embedded in this eco-system. Second, we are conscious that to support the AI buildout a significant amount of energy infrastructure investment is likely on the horizon. As a result, we are holding an exposure to Listed Infrastructure companies, who are likely to benefit from this cycle. Finally, we closed out our position in US Value³ after it delivered strong returns.

The third theme is: inflation concerns. The closure of the Strait of Hormuz disrupted global supply chains, the consequences of which will last beyond its re-opening. Furthermore, damage to infrastructure in the region will constrain energy supply over the medium term. Both of these factors are likely to keep upward pressure on prices, and result in sticky inflation.

This expectation of higher inflation is primarily influencing our view on bond markets. Most notably, we continue to have a preference for shorter dated and inflation linked government bonds. Additionally, we have added a holding in Chinese government bonds which have proven a good diversifier during previous inflation spikes.

If you’d like more detail on our outlook, portfolio changes, or performance, check out the latest Quarterly Update. Thanks for watching!

Disclaimers

Capital at risk.

The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

This document is marketing material and will expire 12 months after issue. In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

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¹ There can be no guarantee that the investment strategy can be successful and the value of investments may go down as well as up.

² Source: Bloomberg, 31/06/2026

³ The US Value exposure aims to gain access to undervalued stocks in the US market.