Qualis Macroeconomic Round Up: 5 May 2026

Dramatic headlines have markets, and investors alike, nervous. But what are the real implications for portfolios, and what’s just noise? In this regular market update, we analyse the past fortnight and discern between the two.

The News

The Middle East conflict has continued to dominate headlines. An uneasy ceasefire was reached in April, allowing for faltering talks to commence between the US and Iran. However, recent sporadic missile strikes in the region – combined with rhetoric from both sides about talks failing to proceed – has left this ceasefire finely balanced. A point of contrition remains the blockade on the Strait of Hormuz that has continued to restrict oil distribution and – by default – push energy prices up. All in all, the situation remains fast-moving and steeped in uncertainty.

This is already having economic impacts closer to home with many of the key interest rates recently being held. In the last week of the month, the Federal Reserve, the Bank of England and the European Central Bank all held rates where they are, due to the ongoing uncertainty in the global economy. Tellingly, the Bank of England warned that rates could rise due to the “very big shock” of rising energy prices.

Market Movements

Since 20 April, major equity markets have been mixed. Although the S&P 500, FTSE 100 and EURO STOXX 50 are all marginally higher now than at that date, uncertainty around the direction of the Middle East conflict has been reflected in trading during that period.

Today, as markets opened to news of the latest developments in the Gulf, trading was clearly mixed. The FTSE 100 has been middling around the 10,200 mark, while the EURO STOXX 50 has climbed from around 5,700 to over 5,800. We wait to see how the US markets will trade, but the past two weeks have seen relatively flat movement from the S&P 500 which has only ticked up from around 7,100 to 7,200.

There has been more significant movement in bond yields. US 10 Year Treasuries rose from 4.25% on 20 April to a high of 4.45% on 5 May, only recording a slight dip at the first few days of May. Over this same period, a 10 Year Gilt has also risen with yields climbing from 4.83% on 20 April to 5.10% on 29 April, however this also falls before recovering in early May. This movement in yields came as markets began to weigh up the implications of higher energy prices and rising inflation from a sustained Middle East conflict.

A key metric the world has been watching is the price of oil, which has entered into the spotlight due to the blockade on the Strait of Hormuz (which accounts for around a quarter of the world’s oil supply). The price of a barrel of crude oil, often seen as the benchmark for the world’s oil market, has remained over $100 since 20 April and even hit $118 on 29 April. This has since come down slightly, but as of 5 May is still at $113.

How this impacts us

In the MGTS Qualis Defensive Fund, we are glad that bond markets appear to have told a different story to the panic seen in oil prices. In April we increased our overall floating rate bond exposure to 25%, via both the iShares $ floating rate bond ETF and an increase to the Royal London Diversified Asset Backed Credit fund. With no end in sight to the conflict and potential political turmoil in the UK, we would much rather watch from the sidelines than buy potentially volatile yield that could very well go higher.

Meanwhile, in the MGTS Qualis Growth Fund, we have seen value in equities but not where you would expect. The best stock performers have been within the existing iShares Edge MSCI World Value Factor ETF, with the best returns generated in names linked to old tech and AI infrastructure. These are the kinds of companies that manufacture the chips and hardware needed for new technologies like AI.

Looking Ahead

In times like these, it is important to remember how diversified we are with downside protection built into our funds. In terms of sentiment, it is clear that markets will hinge on the oil price normalising and the Middle East conflict de-escalating. It is hard to say how this will pan out with such a fast-moving event.

However, we remain significantly diversified across regions and sectors, both protecting our investors on the downside while positioning ourselves to benefit from the upside when this appears.

Past performance is not a guide to future returns. The value of investments can fall as well as rise, and investors may not get back the amount invested.

Disclaimer –

This article does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the products described within. You should consult your financial adviser before making any decisions.

Please note that any performance figures are provided for information purposes only and are not to a guide to future returns. The performance of your own investments may deviate due to a number of factors, including product charges, the timing of contributions & withdrawals and portfolio rebalancing.

Important Information –

As always with investments, your capital is at risk. The value of investments is not guaranteed and the income from them can fall as well as rise. Investors may not get back the amount originally invested. Past performance is not a reliable indicator of current or future results and should not be the sole consideration when selecting a product. The basis of taxation may also change from time to time. We have not considered the suitability of these investments against your individual objectives and risk tolerance. This article is intended for information purposes only.

The MGTS Qualis funds are operated by Margetts Fund Management Ltd (MGTS) the Authorised Corporate Director. GWA Asset Management Ltd (GWAAM) has been appointed as the Investment Manager, a wholly owned Greaves West & Ayre Group business. GWAAM is authorised and regulated by the Financial Conduct authority and is entered on the Financial Services Register https://register.fca.org.uk/ under FRN 960226

Margetts have full responsibility for the management and operation of the funds as the Authorised Corporate Director.

Margetts Fund Management Ltd is authorised and regulated by the Financial Conduct Authority no. 208565. More information about MGTS can be found by visiting their website – MGTS (mgtsfunds.com).