Fund commentary
June was a month of varying market performance. The initial US-Iran peace deal raised hopes of reopening the Strait of Hormuz. However, following the rally in April and consolidation in May, the post-peace moves largely reflected an unwinding of geopolitical trades. Oil prices fell sharply, boosting investor sentiment, although inflation and central bank messaging tempered optimism. In the UK, following months of pressure, Keir Starmer announced that he would step down as Prime Minister.
Fixed income markets had a more constructive month as government bond yields eased slightly following the easing of Middle East tensions, while corporate credit continued to perform well. Inflation, central bank messaging and economic data releases continued to create volatility. Strong cash flow generation and manageable debt levels helped investment-grade spreads tighten slightly. High-yield bonds also delivered positive returns, although investors became increasingly selective.
US equities declined amid concerns over rising inflation and the potential for further interest rate increases. The Federal Reserve left interest rates unchanged and indicated that inflation may be coming under control, raising expectations that monetary policy could ease later in the year. Technology and AI-related companies continued to lead market performance, supported by financials. Elon Musk became the world’s first US dollar trillionaire following the highly anticipated SpaceX IPO.
The Bank of England voted to keep interest rates on hold, although dissenting members voted in favour of a rate increase. Markets continued to expect policy easing later in the year, but uncertainty surrounding the future direction of UK government policy increased following Sir Keir Starmer’s resignation on 22 June. This triggered a leadership contest, with Andy Burnham emerging as the likely successor following his by-election victory on 18 June. Meanwhile, the European Central Bank raised interest rates in response to inflation and higher energy prices, signalling that inflationary pressures may remain elevated for longer than previously anticipated. Equity markets, however, benefited from the ceasefire announcement and lower oil prices.
Asian equities declined during the month as weaker oil prices, slowing economic growth and geopolitical uncertainty weighed on investor sentiment. Korea and Taiwan continued to benefit from exceptionally strong semiconductor demand, while Japanese equities remained broadly positive, supported by the Bank of Japan’s cautious monetary policy.
Expectations of future US interest rate cuts led to a modest weakening of the US dollar. The unwinding of geopolitical trades saw oil prices decline by around 20% to approximately US$70 per barrel, while gold fell a further 11% as demand for safe-haven assets eased. Industrial metals strengthened, supported by continued investment in technology and infrastructure.
The FIFA World Cup, co-hosted by Canada, Mexico and the United States, began with considerable excitement and some controversy. The early stages of the tournament generated positive headlines for countries beginning with the letter “C”. Curaçao, the smallest nation ever to qualify, scored its first World Cup goal, while DR Congo also celebrated its first goal. Fellow debutants Cape Verde became the smallest nation ever to reach the knockout stages, and Canada progressed to the Round of 16 for the first time after securing their first-ever World Cup victory. Despite many matches being hosted in New York and New Jersey, basketball dominated local headlines as the New York Knicks won their first NBA Championship in 53 years.
All performance figures are in GBP unless otherwise stated.
Monthly data as at: 30/06/2026. All information also available to download here
