Emerging/Frontier

VantagePoint: The Iran War Fuels the Case for Portfolio Resilience

The Iran War is testing markets’ tendency to look past geopolitical shocks. Alternative shipping routes, inventory drawdowns, and supply outside the Middle East have kept crude moving, but refined fuels and LNG remain constrained, leaving little room to absorb further disruption. Our base case is a simmering conflict with partial energy flows and elevated, volatile costs, while wider disruption could push inflation higher and slow growth. Investors should stress-test portfolios alongside spending needs and other obligations, reduce overlapping exposures, and add distinct return drivers while retaining growth holdings supported by long-term valuations.

India: In the Geopolitical Crosshairs

Once perceived as a US ally, India has recently been thrust into geopolitical crosshairs. Given the increased macro uncertainty, we would not overweight India at this time, particularly as equity valuations remain elevated despite the recent underperformance. Trade policies remain in flux, and there are measures that India can take to counter the near-term impact of tariffs. However, investors should monitor negotiations around India’s Russian oil imports, as these could have wider implications for the economy and market, especially the rupee.