The Impact of the Russia/Ukraine Conflict upon Investment Markets

We have all been shocked by Russia’s invasion of Ukraine. Of course, our first consideration is the resulting human impact and with those caught up in the conflict. Our thoughts are with all of you who are directly impacted by these events.

We also want to reassure clients that we are monitoring the situation closely and provide assurance that we will continue to manage our portfolio to best safeguard investments as events unfold.

There is volatility in the markets due to concerns regarding inflation, supply-chain issues, and the overall uncertainty of the situation. The risks, as news and actions on the ground rapidly change, are hard for investors to analyse. However, we will continue to ensure investments decisions are driven by our measured approach based on economic fundamentals.

The main economic impact of the conflict will be in relation to energy prices. To date, sanctions imposed on Russia have been designed to minimise the actual impact on supply, but energy prices will remain highly sensitive. With governments across the world now focussing upon energy, agriculture and military independence, spending demands will change both during and after the conflict.

Ultimately, the world is underinvested in commodities and over-invested in technology.  We believe the pattern of alternating decade-long cycles between the two is reasserting itself.

Despite the present unpredictability, it is imperative investors know that historical geopolitical events, even those involving major energy producers, have not had a lasting impact on markets. Markets are resilient over the long run and previous equity sell-offs due to geopolitical events have tended to be short and sharp.

As ever, we are always available to discuss any concerns and answer any questions that you may have. But please be assured that if we believe conditions will materially change from our base view, we will act immediately.