July 2026 Performance Update

Our last few monthly updates have been reasonably positive. Progress on the US/Iran conflict in June caused global energy prices to fall back and allowed both bonds and equity markets to recover from March lows. Generally, lower oil prices means less inflation pressure to come down the line, giving interest rates a better chance of falling – which, in turn, is good for all investment assets. At the same time, Q1 corporate results out of the US were strong, and after a pause for breath in the first quarter of the year, the US technology sector continued to drive global stock markets higher.

Of course, nothing with Trump is certain. Throughout the conflict in the Middle East there has been escalation then de-escalation, followed by pauses and re-escalation. On the one hand it has become slightly frustrating, and on the other, it has given us plenty of opportunities which, so far, we have managed to take advantage of. Just in July, the rhetoric roller coaster moved oil prices from $80 at the start of the month, to $100 on 23rd, then back to $90 at month end, and at the time of writing (5th August) are back to $80 again. Some ride!

Running alongside the conflict in the Middle East, investment market concerns continued to grow around the sustainability of AI spending, with much news flow about AI-related businesses being in a “bubble”. There have been a few similar episodes across recent years – this time the narrative was based around the rapid development of China’s semi-conductor and AI infrastructure capabilities, and the challenge this placed to US-based businesses. There are certainly challenges in the AI sector, and this was evidenced again in the volatility within markets, particularly in July, with the main US tech index falling 7.2% from peak to trough, though so far on each occasion they have recovered strongly.

The other key factor to highlight in July was the selection of Andy Burnham’s new cabinet. We were surprised his choice of John Healey as chancellor, moreover as he wasn’t a name associated with the role until very shortly before it was announced. Nonetheless, markets were happier given Healey’s wealth of political experience, and perhaps equally that he is more centrally positioned economically than some of the other potential suitors. That said, looking forward, the key judgement might be best reserved until the upcoming budget in late October.

So, with lots of noise and lots of change in July, it was not surprising that portfolios pulled back a bit, with Low Risk, for example, falling 0.54% on the month and High Risk 1.14%. Our bond portfolio performed well, delivering a flat outcome as the volatility in oil markets was offset by a bit of clarity on the UK political front. Similarly, despite certain equity markets down c5% on the month, our equity bucket protected well. This was in particularly helped by our overweight position to the UK, which bucked the trend and added 3.6% in July.

Altogether, when added to the first half of the year, we now have portfolio returns between 3.27% (Low Risk) and 9.95% (High Risk) after 7 months of 2026, all nicely ahead of benchmarks, and with some really good value in our portfolio’s helped in part by July’s volatility.