Adapting portfolios for a more fragile world

Hopes that geopolitical tensions might ease have once again faded. The failure of negotiations between the US and Iran has left the Strait of Hormuz effectively blocked, with global shipping in oil and gas markets severely constrained and the outlook for a resolution increasingly uncertain. The brief window of relief markets enjoyed through the ceasefire has now only reinforced just how fragile the global backdrop has become. Investors can no longer treat geopolitical shocks as temporary disturbances that quickly fade from view. Although oil prices initially fell on optimism surrou...