March 2026 was a tumultuous period for financial markets as the conflict in the Middle East upended prevailing market narratives. The prospect of sustained disruption to energy markets raised stagflationary fears as oil prices rocketed above $100 per barrel and the Strait of Hormuz shipping route was closed. There were few places to hide as equities, bonds and traditional safe havens such as gold all sold off in tandem. Trading highlights for March:
• Reduced Asia/Japan equities. Asian and Japanese equity markets have benefitted from a significant valuation re-rating, supported by international capital flows out of the US and sentiment-driven retail demand.
• Added to short-dated US TIPS, which we believe provide attractively priced insurance should higher energy prices push inflation and bond yields higher.
• Added to short-dated gilts to lock in attractive yields following the re-pricing of near-term UK interest rate expectations that pushed front-end gilt yields materially above current short-term interest rates.
• Fixed Income: The Premier Miton Global Dynamic Credit Fund was added during the month. This is a flexible credit strategy managed by the experienced fixed income team at Premier Miton led by Lloyd Harris. Lloyd and his team have an exceptional long-term track record of disciplined underwriting and effective management of credit and interest rate risk through the cycle. The Baillie Gifford Strategic Bond Fund was sold.
• International Equities: The Impax Environmental Assets and T. Rowe Price US Smaller Companies funds were sold as we sought to reduce economic sensitivity and valuation risk across the portfolios
International Equities
International Equities had a difficult month. While all stock markets posted negative returns, regions reliant on imported oil and gas such as Japan (Pictet Japanese Equity Opportunities -12.1%), Europe (Blackrock European Dynamic -10.8%), and Asia (L&G Pacific Index Trust -12.8%) were hit the hardest. In contrast, the US (Vanguard S&P 500 ETF -3.2%) proved more resilient despite its central role in the conflict, albeit the reported numbers were flattered somewhat by timing and currency effects as the dollar strengthened. The US stock market staged a significant late rally on the final day of the month after most other bourses had closed.
UK Equities
UK Equities declined in line with the market, with most sectors in the red aside from energy. Key detractors included Future (-28.6%), Intertek (-22.7%), Weir (-20.6%), Fevertree (-20.0%), Convatec (-16.0%), and Cairn Homes (-13.7%), partially offset by double-digit gains from Shell (+16.6%) and Trainline (+16.2%), and a pleasing contribution from new holding Diploma (+5.1%), which reported strong trading and upgraded full year profit guidance.
Fixed Interest
Fixed Interest generated modest negative returns as income generation was insufficient to fully offset the marked-to-market impact of the significant move up in bond yields. The UK yield curve moved sharply higher, leading gilts to notably underperform after the Bank of England guided to tighter monetary policy to contain the impact of the energy shock on inflation. The Funds’ fixed income allocations were cushioned somewhat by exposure to inflation-linked government bonds (iShares USD TIPS 0-5 Year ETF +0.2%), as well as a deliberate bias to less volatile, shorter tenor lending.
Alternative Assets
Alternative Assets had a mixed month. Modest declines across listed infrastructure and absolute return were dragged down by sharp falls across UK real estate investment trusts in response to the dramatic move up in gilt yields, a proxy for future borrowing costs. The Brevan Howard Global Absolute Return Government Bond Fund (+2.2%) was the best performer while Tritax Big Box (-16.8%) led the debit column.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/cornelian-risk-managed-funds-monthly-update
Cornelian Risk Managed Funds – Monthly update
March 2026 was a tumultuous period for financial markets as the conflict in the Middle East upended prevailing market narratives. The prospect of sustained disruption to energy markets raised stagflationary fears as oil prices rocketed above $100 per barrel and the Strait of Hormuz shipping route was closed. There were few places to hide as equities, bonds and traditional safe havens such as gold all sold off in tandem. Trading highlights for March:
• Reduced Asia/Japan equities. Asian and Japanese equity markets have benefitted from a significant valuation re-rating, supported by international capital flows out of the US and sentiment-driven retail demand.
• Added to short-dated US TIPS, which we believe provide attractively priced insurance should higher energy prices push inflation and bond yields higher.
• Added to short-dated gilts to lock in attractive yields following the re-pricing of near-term UK interest rate expectations that pushed front-end gilt yields materially above current short-term interest rates.
• Fixed Income: The Premier Miton Global Dynamic Credit Fund was added during the month. This is a flexible credit strategy managed by the experienced fixed income team at Premier Miton led by Lloyd Harris. Lloyd and his team have an exceptional long-term track record of disciplined underwriting and effective management of credit and interest rate risk through the cycle. The Baillie Gifford Strategic Bond Fund was sold.
• International Equities: The Impax Environmental Assets and T. Rowe Price US Smaller Companies funds were sold as we sought to reduce economic sensitivity and valuation risk across the portfolios
International Equities
International Equities had a difficult month. While all stock markets posted negative returns, regions reliant on imported oil and gas such as Japan (Pictet Japanese Equity Opportunities -12.1%), Europe (Blackrock European Dynamic -10.8%), and Asia (L&G Pacific Index Trust -12.8%) were hit the hardest. In contrast, the US (Vanguard S&P 500 ETF -3.2%) proved more resilient despite its central role in the conflict, albeit the reported numbers were flattered somewhat by timing and currency effects as the dollar strengthened. The US stock market staged a significant late rally on the final day of the month after most other bourses had closed.
UK Equities
UK Equities declined in line with the market, with most sectors in the red aside from energy. Key detractors included Future (-28.6%), Intertek (-22.7%), Weir (-20.6%), Fevertree (-20.0%), Convatec (-16.0%), and Cairn Homes (-13.7%), partially offset by double-digit gains from Shell (+16.6%) and Trainline (+16.2%), and a pleasing contribution from new holding Diploma (+5.1%), which reported strong trading and upgraded full year profit guidance.
Fixed Interest
Fixed Interest generated modest negative returns as income generation was insufficient to fully offset the marked-to-market impact of the significant move up in bond yields. The UK yield curve moved sharply higher, leading gilts to notably underperform after the Bank of England guided to tighter monetary policy to contain the impact of the energy shock on inflation. The Funds’ fixed income allocations were cushioned somewhat by exposure to inflation-linked government bonds (iShares USD TIPS 0-5 Year ETF +0.2%), as well as a deliberate bias to less volatile, shorter tenor lending.
Alternative Assets
Alternative Assets had a mixed month. Modest declines across listed infrastructure and absolute return were dragged down by sharp falls across UK real estate investment trusts in response to the dramatic move up in gilt yields, a proxy for future borrowing costs. The Brevan Howard Global Absolute Return Government Bond Fund (+2.2%) was the best performer while Tritax Big Box (-16.8%) led the debit column.
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/cornelian-risk-managed-funds-monthly-update
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