Market Commentary
Q2 2026
Global equities rebounded strongly during Q2 2026 following a challenging first quarter. Investor sentiment improved as tensions in the Middle East eased following a ceasefire framework between the US and Iran, leading to a sharp decline in energy prices and reduced inflation concerns. The resurgence of enthusiasm surrounding artificial intelligence (AI) and related capital expenditure themes provided significant support to equity markets. The MSCI World Index rose approximately 13.8% over the quarter, while the S&P 500 delivered its strongest quarterly return since 2020, gaining around 15.2%.
Developed Markets
Emerging market equities performed strongly during the quarter, benefiting from improved risk appetite, a stabilisation in global growth expectations and continued demand for AI-related supply chains.
Emerging Markets
Europe (ex UK)
European equities generated positive returns in Q2 2026 as declining energy prices helped alleviate concerns surrounding inflation and economic growth.
UK equities participated in the global recovery, although performance was more moderate relative to technology-led markets such as the United States due to its more defensive nature and exposure to commodities.
UK Equities
Fixed income and Monetary policy
Fixed income markets delivered modest positive returns during Q2 2026. As energy prices retreated and inflation pressures eased, investors became increasingly optimistic that central banks could begin considering a less restrictive policy stance later in the year.
Commodities
Commodity markets reversed a significant portion of the gains experienced during the first quarter. The Bloomberg Commodity Index declined by approximately 8.1% as the easing of Middle East tensions reduced concerns over global energy supply disruptions.
Q1 2026 IP MPS Performance and fund changes
Accumulation Range
During the quarter, we continued to focus on maintaining diversification across the Accumulation Range whilst ensuring portfolios remained aligned with their long-term risk objectives. We introduced the Ranmore Global Equity fund which is a value focused global equity fund and adopts a ‘bottom up’ investment management style and incorporated the PIMCO GIS fund which is an actively managed fixed income fund that consistently delivers a high and sustainable yield.
Income Range
Our Income Range continued to perform competitively relative to benchmark and competitors. We introduced the PIMCO GIS fund into the moderately cautious and balanced portfolios for its consistently delivered yield.
Passive Range
No changes were made within the Passive Range during Q2 2026 as performance was strong and OCF remain low.
Martin Nelmes
Investment Director and Chairman of the Network Investment Committee
This document is aimed at Investment Professionals only and should not be relied upon by Private Investors. Our comments and opinion are intended as general information only and do not constitute advice or recommendation. Information is sourced directly from fund managers and websites. Therefore, this information is as current as is available at the time of production.
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