Qualis Macroeconomic Round Up: 23 March 2026

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

The News

The past fortnight has seen armed conflict in the Middle East escalate, with the US and Israel exchanging missiles with Iran. This has seen strikes launched against several Gulf States as tensions ratchet up.

Aside from the human cost of the conflict, this has also had economic ramifications. Missile strikes against key liquid gas sites, and Iran’s blockade of the Strait of Hormuz, has caused shockwaves in global energy markets. Oil soared to over $100 a barrel when the conflict ignited and has stayed there.

The world is watching these developments with interest, not least to see if other major nations – such as the UK – will get directly involved, but central banks’ monetary policy has already been impacted. The Bank of England, the European Central and US Federal Reserve all held their rates last week due to the uncertainty of the Middle East situation and more specifically what this could mean for inflation.  

Market Movements

Since 9 March, many of the world’s major equity markets have been trending downwards. In this time the S&P 500 has fallen from 6,795 to 6,506, while the EURO STOXX 50 slipped from 5,685 to 5,388. Similarly, closer to home the FTSE 100 has fallen from 10,249 to 9,764.

We have also seen movement in bond yields. With the anticipated inflation spike on the horizon due to the Middle Eastern conflict, 10-year gilt yields are rising sharply, with cautious investors getting impacted with severe price falls. Since 9 March, British 10-year gilt yields have risen from 4.65 to 5.04 while those on US 10-year Treasuries have increased from 4.10 to 4.41.

When looking at some of the more drastic moves in markets, such as when the S&P 500 fell from 6,606 to 6,506 on 19 March alone, it’s clear that equity diversification matters. The recent fall in equity market valuations could provide an attractive entry point for investors who have yet to diversify away from US dominance.

How This Impacts Us

Interestingly, we have seen no divergence at this time of market volatility between major indices in developed markets and those in emerging markets.

This speaks to the importance of diversification and not being overly concentrated to any one region. This is reflected directly in our strategies. We have an overweight to emerging markets within growth; 14% discreet through emerging market funds and then another c.5% through our global cohort. In contrast, IA Global EM exposure is c.1.0% with Asia making up another c.6.5%.

Emerging Market Opportunities

We are bullish on emerging market opportunities and this attitude is shared by many of our underlying managers. Like everyone, they’re watching global events with interest but this has not diminished their conviction in emerging markets and the potential to generate returns. In fact, some have argued this has actually enhanced their view.

“As emerging markets are exposed to fundamentally more cyclical sectors, and its equities are priced by skittish foreign investor capital, the rewards for skilled active management can be immense,” says Aaron Macksey, managing director and portfolio manager at Merlin Fidelis. “While Asian nations are particularly reliant on energy imports from this region, they are also the best able to fund the inflationary impacts. We can readily identify many attractive investment opportunities, overlaid with deeply conservative corporate balance sheets.”

A key benefit many of our managers see is the attractive cost of emerging market investments, especially given how high valuations have drifted in developed markets – despite recent volatility.

“One of the attractions of emerging markets is you can often find high-quality local, regional or global leaders trading at discounts to similar businesses in developed markets,” says Miguel Oleaga, manager of the Thornburg Global Opportunities Fund. “CATL illustrates that: it’s a globally-dominant [Chinese] EV battery company, with strong growth potential, significant reinvestment in R&D and capex, and an attractive valuation relative to its business quality.”

Of course, emerging markets can still be impacted by the Middle East conflict. In particular many Asian economies are heavy consumers of oil, and the closure of the Strait of Hormuz will be costly. Ygal Sebban, investment director of the GAM Sustainable GEM Fund, is watching this closely.

“Ultimately, the duration of the shock will be decisive: if the crisis is resolved quickly, emerging markets — particularly Asia — should remain relatively well positioned; if not, energy risk could evolve into a broader macroeconomic shock,” says Ygal. “The long-term structural story in emerging markets is driven by demographics, with younger populations, stronger growth and rising inflation. Despite geopolitical tensions and a more complex environment, the cyclical picture remains constructive.”

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).