Market outlooks

Good afternoon, everyone, and welcome to the multi asset quarterly webinar. Apologies for the delay. We had a few technical issues, but now we're back up and running. My name's Tom Cole and I'm a national account manager at Royal London, and I'm delighted to say I've been joined by Trevor Greatham, head of multi asset at Royal London. So, the plan today is to take you through markets over the last quarter and what this has meant in terms of our thinking and positioning within the multi-asset proposition here. Please submit questions as we go through and we will get to them at the end of the talk. So, without further ado, I will pass over to Trevor.

Great. Thanks very much, everyone. Quick overview of what's going on in the world. I mean, it's changing by the minute at the moment. I think we need to be active on all levels. We're active with our strategic mix, the asset classes we include, the weights that we give to them. We're active tactically and through security selection. The two big themes which I'm going to flesh out in the next half an hour or so are the 1970s-style Middle East conflict, which obviously is impacting oil and resulting in some kind of economic trends that feel like stagflation.

You can see the investment clock there on the right-hand side. That yellow dot is in the corner of the clock, which reflects a slowdown with rising inflation. We were hoping that was behind us with the fragile peace between the US and Iran, but as we recorded this, there are more missiles flying around and it may be that things are restarting again. So, we're trying to navigate that sort of 1970s-style conflict that has the power to pull the world into recession if oil prices rise significantly. At the same time, we're also trying to navigate a different decade: a 1990s-style tech bubble. So, we've got the artificial intelligence boom in full swing. It's inflating stock prices but also inflating earnings. We don't know if these are sustainable high levels of corporate earnings or whether they're peak-cycle earnings. Cycle-adjusted valuation suggests we should be a little bit careful, but historically, financial market bubbles tend to burst when money is tightened. At the moment, we're not seeing the risk of dramatic interest rate rises. We'll come back to that one.

So, let's kick off by just a quick reminder. We're talking here about the multi-asset portfolios from Royal London. We have the global multi-asset portfolios, the GMAPs, which launched on a range of platforms in 2016, just over 10 years ago, and we have the Governed Range, including the Governed Portfolios, that launched as a pensions and now an ISA proposition in 2009. They're consistent but not identical. You can see how they cover the risk spectrum here, from defensive all the way out to the pure equity fund. The names are not exactly mapped together, but you can see which ones are aligned with each other. If you look at the chart at the top right, you could pull that down yourself from Trustnet. That tracks GP Conservative with its equivalent GMAP Balanced since 2009, and you can see the sort of consistent performance between the two equivalent funds. You see a pretty steady risk-adjusted return there over the period.

Performance: looking at 1, 3 and 5-year performance. 1-year performance. This is the GMAPs. We're mostly 1st and 2nd quartile. There are a couple of funds in the same sectors here which can result in some funny situations, but basically, over 1 year and over 5 years, mostly 1st and 2nd quartile. Over 3 years, you've got a bit more of a mix because that really picks up the equity-driven market of the last 3 years. So, over the longer time frame, including that post-pandemic recovery, you're looking at strong performance in absolute terms but also versus the peer group. We're sharing a slide, which we haven't used on these webinars before, on the next page here, looking at some peer group comparisons for the Governed Portfolios.

Now, apologies. These are pretty small on your screen, but hopefully the colour green jumps out at you. On the left-hand side, we're looking at the performance of different Governed Portfolios versus the ARC MPS peer group. So, you're thinking about model portfolio solutions. The different Governed Portfolios have been outperforming over 1, 3 and 5 years versus the ARC peer groups. On the right-hand side, you've got the insurance peer groups, the ABI benchmarks, and again, 1st and 2nd quartile over all the time periods. So, it's a kind of combination of specific strategic mix, tactical asset allocation and our security selection. So, as you see on this slide, active on 3 different levels, which allows us to develop portfolios that we think are appropriate for your client needs, for different levels of risk appetite, but adapting with the times as they change. And the times they are changing.

In terms of the strategic mix, if you had two asset classes, just stocks and bonds, there's pretty much a single answer to the question of what your strategic asset allocation should be. You dial the equities up, the bonds go down and you get your 50/50, or 60/40, or 70/30 or 80/20 equity bond split, and that's basically job done. For us, we've got 5 or 6 really quite distinctive asset classes, with varying correlations, different behaviours in terms of the business cycle, and different correlations. And so, there's an element of art as well as science here, where we look at portfolios that are at the right level of risk, but we're looking at a range of different factors to decide how to set the strategic mix. They will include valuation, medium-term outlook and resilience to emerging scenarios.

If you look at different asset classes over the last few years, you can see a big variation year to year in performance for different investments. In the middle there, you can see the multi-asset block, and that's the benchmark for mid-range multi-asset portfolios there. And what you can see is that sometimes there will be some asset classes doing better, some doing worse, but the idea of having this broader diversification is you get a smoother journey and, over time, you would expect a better risk-adjusted return.

Shout out here for commodities. They were an asset class people didn't like, really, prior to the pandemic, and they came out very strongly from the pandemic 2 years in a row of about 30% return. Then, obviously, year to date, they're up 16%. Not as much money as people have made in emerging market stocks, particularly the semiconductor stocks in Korea and Taiwan, but that's a pretty decent year-to-date return. Given that oil prices, at the time we put this together, were off their highs quite significantly. There's still some good resilience coming from commodities there. We think that commodities are a very useful asset class to have in the strategic mix. Most portfolios that we look at from competitors don't include them. We've written quite a lot of research you'll be able to look up on the idea that we're in an era with more inflation risk. We've called it an era of spikeflation.

If you look at the graph on the left-hand side, you can see the CPI in the US and the UK since 1914. And you can see periods where inflation can be very spiky around the two world wars and in the 1970s. Now, we think we're in a 1970s-style period, where a mixture of chronic commodity underinvestment, deglobalisation, heightened geopolitical risks and high levels of debt mean that you can suddenly see new price level shocks. That first one you can see there, or the last one I should say on the graph, was the pandemic. If we do see a worsening of the Middle East crisis, we could see a second inflation spike coming through at the moment. We'll talk more about oil a bit later.

So, the distinctive things about the Royal London approach then is the real assets, like commodities but also commercial property, which give you resilience and a bit of a hedge against inflation. And that's really useful because the bonds in a multi-asset portfolio are vulnerable to inflation shocks. We've got a broader diversification within the growth-seeking assets with the commercial property, but also with our approach to regional equity allocation, where we don't just follow the benchmark weights and we're less concentrated in the US. We've got a greater exposure in the UK and emerging markets, which are relatively less expensive. And then, on the fixed income side, we don't just invest in investment grade bonds and government bonds. We've got a very broad range of exposures, including high yield bonds and, in some cases, emerging market corporates.

The review we completed most recently added a bit more to emerging market equities. We did that early in the summer as a way of getting alternative exposure to the faster-growing technology sectors at a valuation discount compared to the US. That valuation discount has mostly closed, actually, in the last couple of months, given the strong performance of emerging markets in Korea and Taiwan. But we still think there's a trend of emerging markets deserving more developed market ratings, which argue for this increased exposure to emerging markets. We diversified our credit exposure further. So again, there's a bit of a trend here of trying to reduce exposure to the more expensive US asset markets, both with equities and in fixed income, so decreasing our global high yield exposure with quite a big US weighting and increasing things like European asset-backed securities and/or emerging market corporates, a way of just getting a broader exposure to different borrowers. Then finally, something we've been doing a bit for the last years is adding to bond duration. Tactically, we don't love bonds at the moment, but they've got higher yields than they used to have, and that means that, compared to where we were before 2022's bond market crash, where we've got more money, we've been adding to take advantage of higher bond yields.

There's a little bit more detail on this before we get into the tactical decision. This is just looking at the emerging market equity change in the strategic mix. On the left-hand side, you can see those two lines are the volatility, in teal, of emerging market equities, and in purple, of developed market equities. And emerging markets used to be a lot more risky, a lot more volatile than developed markets, and they've matured a lot. And so, you see the volatility of emerging markets has come down and we think that means they shouldn't be at a PE discount. On the right-hand side, you can see there is a bit of a discount versus US equities, but as I said, it was closing pretty fast. But we were able to get access to the same kind of growth story as the US, but with a bit broader diversification.

Looking at credit markets, credit spreads are very tight. This graph looks at US high yield spreads relative to government bonds. The spreads are towards the lowest that we've seen in the last few decades, and that's why we're diversifying out of global high yield into other areas where we can pick up spread.

And then government bonds are much more attractive than they used to be. Before 2022, we used to joke, and we didn't make this up, but we keep repeating it, that government bonds are supposed to be risk-free return. And at that time, they were return-free risk, because gilt yields got down to something like 0.1% yield. Can you believe it? The 10-year gilt was 0.07% yield at one point. The inflation target was 2%. You're getting a zero nominal yield, you've got an inflation target of 2%, and as we said in 2021 onwards, we thought there would be a more inflationary post-pandemic recovery, and the rest is history. So, you had that bond market crash. The good news is that, with gilts trading at something like 4% to 5% yields, that gives you a 4% to 5% expected return if the yields stay at those levels, which is much more attractive. So, prior to 2022, the Governed Range and the GMAP funds had much lower duration exposure than the peer groups, and now we've been adding, so we've got something much more similar.

A picture tells a thousand words. On the left-hand side, we've got a straw man passive balanced fund: 60/40 equities bonds in line with market cap. If someone came in your door with £100, you'd be saying, I've got a great idea: put £40.90 in North America, another £40 in the bond market, and we'll decide what to do with the other £20. It doesn't matter much. Not very diversified. There's £2 there in UK equities, which wouldn't buy you a latte in Fenchurch Street. On the right-hand side, you've got the equivalent risk bucket Governed Portfolio or GMAP portfolio, and you can see a bit less in equities because we've got the property asset class, a bit more of a balanced exposure across equity regions, with £25 of your £100 in North America. And then you've got the commodities and the high yield, and a more diversified mixture of bonds, basically. That's what it's all about. These are populated using Royal London active funds, either seeking additional return or seeking to reduce carbon impact for the same level, or similar level, of risk. So, we're active on the level of the strategic asset allocation and how we populate it. And then, we have our tactical asset allocation process, which is a daily process where we'll review incoming information and tactical models like the investment clock. And typically, we'll make incremental changes, but making small changes every day means, when things are changing fast, you're up with events.

This is a look at the tactical asset allocation simulated back to 1993. It's the current suite of models and the research process in developing these models, we'll always look at these sorts of long sweeps of history. And what this should give you an idea of is that the different strategies of cross-asset strategies, foreign exchange regions, sectors, credit, active commodities and gold. These are all things that we're not doing based on a kind of discussion or a hunch. We're looking at different choices to make tactically based on proper research, factors, testing and analysis. And this all feeds into a daily meeting where we use our own experience and judgement to decide how big a voice to give the tactical models if there's something else happening.

The investment clock is the first among equals of the tactical models. It's a way of thinking about the business cycle in terms of what's going on with growth and inflation. The way to think about the business cycle is the top left of your screen. So, the solid line is the growth cycle. The dashed line is inflation. Inflation's the hangover after the party, so it's lagged on the growth cycle. There are 4 different stages of the business cycle, depending on whether growth is strong or weak and inflation's rising or falling, and that gives you the four corners of the investment clock. And if you're in an environment of spikeflation, you're going to be on the right-hand side of that clock diagram more often. The right-hand side is where inflation's rising: overheat and stagflation. If you look at the table of numbers, that's looking at real returns since 1973, in the different investment clock corners, and commodities give you these positive real returns in overheat and stagflation. So, you'll see commodities in the funds. The amount you'll see will vary tactically, but you'll always see these commodities in multi-asset funds.

Where is the investment clock right now? Well, some of this is, I want to say, slightly historic, because you know, is the war over? Isn't the war over? Maybe this will flare up again. But you can see a growth scorecard on the left-hand side, which is that shaded area, deteriorated very markedly between February and July. So, the growth picture looks a lot more flaky, and it's because of the Middle East war and the high energy prices. And the Middle East war and the higher energy prices, on the right-hand side of your screen, have impacted our inflation scorecard. So, these global growth and inflation scorecards are part of the way we tell the time on the investment clock.

So, a slowdown with rising inflation, as I mentioned before, puts the yellow dot in the stagflation corner: so weak growth, rising inflation. Now, we're not putting full weight on this in our tactical asset allocation because, if the war ends, the oil price comes down and the inflation numbers will come down. You know, we could get back to a more positive environment, but it's still really hard to know, isn't it? I think my expectation is, ahead of the midterm elections, Donald Trump doesn't really want much higher energy prices, but he might sort of restart the war for a few weeks. You can never tell. So, having the hedge of the inflation-hedging asset classes, like property and commodities, is quite useful.

So, is the Strait of Hormuz open or is it closed? We called the webinar "Strait back to it", apologies for the pun, because of the Strait of Hormuz. And this is a count of tankers. It's not exactly, not exactly flowing as it was prior to the war. So, the number of tankers has picked up a bit. Some of those tankers that squeezed through in the last couple of weeks were very large, so the volumes of oil have picked up quite a bit. You can see the oil price itself there in the bottom half of the screen. It's gone up about $10 since then, with the resumption of some missiles flowing backwards and forwards between the US and Iran. And it's very hard to know if the Strait is really properly reopening. Most people we speak to in the commodity markets, they think that, with a reopened Strait of Hormuz, it's quite hard to get the oil price below about $70 a barrel, partly because a lot of governments have released their strategic reserves to try and provide enough oil over the last couple of months. So, the US and China, in particular, have pumped a lot of oil out of caverns. They're going to want to refill them, so the oil price can't go down too far before you'll get these governments buying the oil to try and refill their supplies. On the other hand, there's plenty of upside potential if a hot war starts again. If we start to see some of the things that were talked about a month ago, with Donald Trump talking about trying to seize Kharg Island, which is an oil terminal island, and Iran hitting infrastructure in the region, it's not impossible to see $150 to $200 oil, which I think would be really quite bad for financial markets. So, again, you can't put too much weight on any one scenario. So, the first line of defence against this kind of risk is broad diversification.

Investor sentiment can be helpful. This graph, we often show, shows the stock market globally in teal and it shows a composite investor sentiment measure in purple. That got to a very panic level in April 2025 on the back of the tariff shocks, and it got quite depressed in March of this year, when we hadn't had the ceasefire yet, round about Easter Day 2026. It's quite good from a contrarian point of view because, when the market's panicking too much, it tells you maybe you should buy the dip. It's not telling us to buy yet, but if you were to see days or weeks, even, of increased tension in the Middle East, you might find sentiment says you should start picking up exposure again.

The bounce back since the war ended has been technology-led, although there has been a bit of a wobble recently. As I mentioned, the two things we're trying to process here are the 1970s-style war risk, which we've talked about, and the 1990s-style technology boom. If you look at technology stocks, they've been doing really well. The graph on the left-hand side of your screen shows the performance of US technology versus the US market. That's the, get this the right way round, that is the teal line. That's a relative price performance, or total return, I should say. And the purple line is the relative earnings. So, you've had very strong earnings for the technology sector and, as a result, strong outperformance. One of my worries about technology earnings is I'm not sure whether we're seeing a technology earnings bubble. So, yeah, people sometimes say to me that the technology sector isn't expensive, or this stock or that stock is only on 12 times earnings or 15 times earnings, but the right-hand side of your screen shows you the earnings numbers. You know, is that a sustainable rise in earnings for semiconductor companies, this is the big 3 memory chip producers, or is that actually itself just a temporary phenomenon? And this sort of gold rush, if you like, towards AI will end and the earnings will come down. This is one of the things that's really hard to judge.

So if we look at the tactical positioning, we have to bear in mind that sometimes things sound too good to be true and then they turn out to be too good to be true. This graph goes back to the 1980s and it shows you bubbles I have known. And I've lost money in quite a few of these and I've made money in others. The first one is the Japanese stock market. So that purple line shows you the performance of Japan versus the world equities, rebased to 100 when the bubble peaked in 1989/1990. And you can see Japan was outperforming hugely at that time. Japan was about 50% of the world's stock market index by market capitalisation, which is kind of hard to believe. Half of my contemporaries when they graduated from university went straight to Tokyo to work for engineering companies in Japan. That's what everyone did. And Japan's was a bubble. Interest rates went up, the bubble burst and you see the underperformance in relative terms. Japan underperformed by 80% over the next decade. Well, as the Japan bubble burst, a new bubble inflated. It was their neighbours in Asia, the Asian tiger economies. That's Malaysia, Indonesia and Thailand, and you see how their stocks did really really well. They were pegged to the US dollar and the Fed was cutting interest rates. And then their dollar pegs broke, and you found a new way to lose money. So, you lost 90% relative over the next 5 years by being in the Asian stock markets, and a lot of that loss was actually on the currency.

Well, don't worry, there's always another bubble coming along. As the Asian tiger economy imploded, the liquidity went somewhere else. It went into the dotcoms. So, the orange line here is the technology sector versus the world. Look how vertical it got. The last year was really really steep, and obviously the Fed was raising rates from the middle of 1999 onwards. And by March of 2000, the bubble burst and you had this big loss in technology. As the technology bubble burst, it was what was called the revenge of the old economy. The green line is mining. The mining sectors became very big, sort of BHP Billiton, Rio Tinto, these guys were like the colossus striding the world. Commodities were being sucked in by China because China was building, sort of, a new Boston skyline in Shanghai every year: a massive commodity-intensive construction boom in China. That green line, which is mining versus the world, also looks like Chinese consensus GDP growth. We had sort of 10% GDP growth at that time in China; it's now more like 2%. And then the next bubble came along and there was actually another bubble, and someone reminded me. The blue one I'm showing is index-linked gilts. So, all of the other ones are equity related. This is a bond bubble, and the crash in bonds that we saw in 2022. But I could have squeezed another one in, which was actually Chinese equities, which in 2015, I think it was, were doubling every 6 months.

I was in Beijing on a visit during that time and I was speaking to someone, a local person. They said, what do I do for a living? I said I was a fund manager, and they said, are you any good? And I said, well, you know, I'm trying really hard. Then they said, how many times have you doubled the money this year? And I realised doubling the money twice was the benchmark. And that burst. Then we got the bond bubble and the last one is Mag 7. Now, I thought I'd rebase this to 100 at what was then the peak. I would have had to redraw this by now because it was going up so steeply. Maybe that's only halfway up the mountain, but so far I haven't had to redraw it. So, that's currently what Mag 7 versus the world looks like. Now, is this a boom? Is it a bubble? It's definitely a boom: massive innovation, lots of potential for earnings growth and productivity improvements. Possibly most of these productivity improvements are the users of AI, not the producers of AI. That was true with the dotcoms, but we will wait and see. And at the moment, we don't have the pin that we can see to burst that bubble, if it is a bubble in the markets, because the Fed has been cutting interest rates.

This graph looks at Fed funds versus the S&P 500 index going back to the 70s. And if you look round the middle, you've got the dotcom bubble there, and there were those rate hikes for 9 months or so before the boom was reined in. We haven't even had the first rate hike yet. Kevin Walsh is the new Fed chair. Market expectations are that rates could be going up. At the start of the year, people expected rate cuts, but the geopolitical shock of the Middle East has created inflation. Now, rate hikes are expected. There's roughly a 1/3 chance priced in that the Fed hikes rates at the end of July. But one rate hike is one rate hike. I wouldn't be surprised to see a series of interest rate rises over the next year, possibly longer, before technology stocks really need to worry. But no one has a crystal ball. So, from a strategic point of view, the valuation of technology, the lack of inflation resilience of stocks and bonds, all of these things say to us: diversify broadly, then our tactical process do its best to make money while the sun shines.

Let's come back closer to home now. This is just something more about the UK political scene as much as anything. This is looking at the numbers of days of tenure of prime ministers in the UK. I've called this the revolving door at Number 10. We haven't got Andy Burnham on here because, of course, he hasn't started as prime minister yet. You wouldn't know it reading the newspapers. But he'll be the 7th prime minister since the Brexit referendum. And it's an interesting question as to how this doom loop can be broken. The UK economy, I think, has been held back over that period, and it's a challenge for Andy Burnham to kind of stay in office and try and repair the structural damage that we've seen since Brexit to the economy. And it will be rather challenging. In terms of the actual portfolios, what's the relevance? Well, we all live in this country, most of us, if we're investing in Governed and GMAPs, so it's relevant to our daily lives. It's also relevant to the property asset class, which has been a strong asset class actually over the last few decades. If we get some extra strength in the UK economy, that's upside. I don't see downside here. I see upside. We're in quite a low ebb. So, if we can get more economic growth in the UK, and that's upside for commercial property. Meanwhile, the valuations we're seeing in AI are a potential downside to equities. So again, the diversification story comes through here. Having the property, we think, is kind of useful.

Current positions before we take some questions. There have been quite a few questions coming through. We're overweight stocks, not dramatically so. There's a bit of a broadening of exposure here, not just technology doing better as the oil price came down. It's a bit bumpy, what's happening with oil and what's happening with Iran, but we think between now and the midterms, probably Trump keeps things under control and the oil price doesn't rise too much. It gives us an opportunity in broad stock market exposure, but this is something you have to assess on a day-to-day basis. That commodity exposure is more or less neutral at the moment. So, on that note, let me pass back to Tom for some questions.

Thanks, Trevor. Yeah, we've had some really good questions come in. So, we've had one about AI. So, seeing this as a major long-term growth theme, but with geopolitical tensions and tariff risks creating uncertainty, how should investors think about the trade-off between thematic investing and broader global diversification? Yeah, I'm always a bit nervous about thematic investing because often the themes are only obvious when they're about to end. You know, so when people launch sort of sector-specific funds, there were lots of dotcom sector-specific funds that were launched very late in the bubble. So, I don't tend to like thematic investing. I'm just more of a meticulous, looking-at-long-term-valuations. So, I think broad diversification really does help you when there are unexpected shocks. It helps with the geopolitics. And the best you can do with a theme that gets caught by the market and inflated in terms of value is to say, well, I do want some exposure to that theme, but I'm not going all in. It's not the only thing I want. So, again, coming back to those tile maps early on, where the passive balanced fund would have put £40 in the US market, you know, don't get too greedy. I think £25 is quite enough.

Thanks, Trevor. And we've had a question about our commodities allocation. So, would we ever increase it beyond the 5%, up to maybe 10%, and what were the reasons? That's a really good question. Commodities are a bit of a Marmite asset class. We're sometimes asked, why aren't all your competitors investing in commodities? Because we've been doing it for the last decade and very few of them do. They sometimes dip a toe in. Commodities in the very long run have got a return that's you know better than cash, but there's a lot of debate about whether it's a lot better than cash, and yet you've got a lot of volatility. What we point to is the diversification benefit. The correlation is very low. You can squeeze them into a multi-asset portfolio and you don't have to sell any equities. You can actually replace bonds with commodities, even though they're much more volatile than bonds, because they're uncorrelated with equities. It doesn't really change the overall risk level. So, we like to put some in at the margin, and then we like to have the ability tactically to increase or decrease that commodity exposure. So typically, they're in 5, plus or minus 5. That's the sort of tactical bandwidth we would like to use, which means at times we could have pretty much nothing in commodities, other times could have about 10%. And 10% feels like quite a lot of your money to be in an alternative asset class. We got close to 10 in 2021/2022. I wouldn't say we got quite there. But we had 7% or 8% in most portfolios, and so there's a question of being different but not too different when it comes to commodities.

OK, thanks, Trevor. And just sort of touching on the point around commodities, how are we tactically positioned within that asset class, given the volatility we're seeing in gold and oil at the moment? Right. So, as of now, a very strong conviction neutral. So, they're in the strategic mix. So, they're there to protect you against the resumption of the war, but there's not a very clear tactical story to be positive or to be negative right now. And so yeah, in gold, we had, in the GMAP funds in particular, we had additional exposure last year, but we reduced that to neutral in the early part of the year, part of it selling just before the peak, part of it just after. I think if there was a big equity sell-off here, you would be tempted to buy equities and maybe to buy gold in an equity sell-off, because gold does tend to get dragged in, it could drop a bit more. It might be tempting to own some gold going into the midterms.

I think we've just got time for one more. So, just thoughts on SpaceX and the $300 target that the Wall Street banks are talking about at the moment? So, that's about a doubling from current levels. It's going to double or halve, isn't it? I mean, who'd predict a 5% increase? Got to be nervous about this. I mean, there are always these very big IPOs and takeovers that happen when paper is this expensive, because from an issuer point of view, it means that finance is very cheap. So, if you're buying a company at 90 times revenues and it's making a loss, I can really understand why the person selling it wants to sell it. I struggle a bit more with understanding why the person buying it wants to buy it. So, I do think that these valuations and some of these sort of big poster-child IPOs just make you a bit nervous. But again, I don't see, at the moment, 6 months or 9 months of Fed rate hikes in the rear-view mirror. Things could get a lot more crazy if this is a bubble. And so, when we're slightly overweight equities this year, we've been overweight technology and commodities. We're a bit more neutral on both of those at the moment, but I could see it going further. But the valuations are really quite worrying.

Yeah, OK. Well, thanks very much, Trevor. I think we'll wrap it up there. I just wanted to highlight as well that we are hosting our multi-asset roadshow later in the year. So, we're doing 11 events across the country in September, October and November, and your relationship manager will reach out to you to give you further details on that. But look, thanks very much for your time again, and I look forward to seeing you on the next quarterly update. Thanks, everyone.

The multi asset funds that we manage are both broadly diversified and actively managed. Currently, the funds have a tactical overweight position in broad commodities and underweight position in global government bonds. And we have a moderately overweight position in global equities, although we have reduced the size on this overweight in recent weeks. So, a more neutral position.

Heading into Q2 of 2026, the funds were positioned more defensively, and we entered the quarter with a small underweight position in equities. We then quickly added back to the asset class, moving to a tactical overweight position on equities across the funds as we observed that investor sentiment had been beaten up and was presenting a buying opportunity.

We can see on the screen here, this chart which shows two lines, so the teal line shows global equities, and the purple line shows our composite sentiment score. And this sentiment can provide quite a strong contrarian signal which we use for our asset allocation decision-making. Back in 2025, we can see just after liberation day, investor sentiment was extremely depressed and actually marked a low in global equities as global equity markets and investor sentiment, both improved quite quickly after some concessions are made following liberation day. In 2026, perhaps you’ve seen a similar thing as investor sentiment marked the lows in equity markets once again by showing an overly depressed signal just around the March-April time before equity markets quickly recovered.

We added to equities tactically on the back of this signal, moving overweight across Q2 and benefitted from that really strong quarter of equity market returns. In fact, partly due to excitement around AI, and partly due to signs of a fragile peace deal and progress in the Middle East, we saw equity markets off the best quarterly return in over six years across Q2. Over recent weeks though, we have slightly reduced our overweight in equities once again seeing signs of fragility and spikes in volatility, so we have reduced our equity position somewhat but do remain moderately overweight for the time being.

We also remain overweight commodities on a tactical basis, and you can see on the screen here, again another chart here, so the top two lines of the chart show tracking data and the passage of tankers through the Strait of Hormuz and the bottom of this chart that line shows oil prices. And as the conflict in the Middle East started at the beginning of this year, you can see that there is a very fast decline and a real sharp drop-off in the passage of tankers through the Strait and the supply chain concerns which arose due to this conflict so oil prices rise very sharply across Q1 and into April.

Over the last quarter, as we did see fragile signs towards a peace deal, ceasefire deals between sides, then market expectations towards peace did see oil prices fall but as that conflict has re-intensified again over the last month, once again, you’ve seen oil prices rise as the passage of tankers through the Strait has again dropped off to virtually nil.

On the tactical basis, we remain overweight commodities and we continue to monitor developments in the Strait. And, from a strategic point of view, our funds hold exposure to commodities within our broadly diversified asset mix. So, the funds have benefitted so far this year, from that material rise up of commodities we’ve seen.

Hello and welcome to the multi-asset webinar on the 1st of April, 2026. My name is Lucy Dean and I sit within the wealth team covering the North of the UK. I'm joined today by Trevor Greetham, the head of our multi-asset team, and Melanie Baker, our senior economist. Today's session will cover recent events, their impacts on markets, and why diversification has never been more relevant.

We'll have a chance to answer questions at the end, so please send them through the portal. And with that, I will hand over to Melanie.

Thanks, Lucy. Alright. So, look, I don't know what's going to happen here any more than anyone else, but the economic effect will be worse the longer the conflict continues.

Do you think that, like, brief spikes in energy prices can leave very little mark on the global economy, more prolonged spikes and things get more damaging. And at the outset, I just want to point out that this crisis is already about more than just oil and gas prices. They know the disruption to trade routes is causing issues for the supply of all sorts of commodities.

And for me, things like the impact on fertiliser costs and availability is a particular concern, meaning essentially higher food prices down the line on top of any impact already had on that sector from higher energy and transport costs. So, big picture: energy shocks lead to higher inflation and lower growth. What happens to interest rates is a little less straightforward.

Right this first chart just gives a crude indication of where you might expect the energy components of CPI to go if oil and gas prices stay where they are. So, in this case, it's a very crude exercise that suggests energy inflation would move from slightly negative to perhaps 20% year on year. And, you know, with weights in the inflation basket of 5% to 10% in different economies — major economies.

Then you're looking at a crude approximation of an inflation impact of 1% to 2% higher. That shouldn't be much of a surprise if we get there. Another reasonable place to start, I think, are rules of thumb. So we can look at some of the scenario analysis and research done by central banks and other institutions on the impact of higher oil and gas prices on output growth.

So GDP and inflation and, you know, again, rising energy commodity prices look set to harm economic growth and drive up inflation at a global level. So the IMF have noted that a sustained 10% rise in oil prices could boost inflation by perhaps 0.4 percentage points. So a 10% rise in oil prices, would boost inflation by 0.4 percentage points and lower global growth by a tenth to two-tenths.

So if you kind of extrapolate that to the size of the recent increase in prices, then you're looking at maybe inflation boosted by perhaps two percentage points and GDP hit by maybe half a percentage point to 1%. Global growth overall is only about 3%, so that's the run rate. So, yes, it could be a significant hit and enough to take you perhaps to at least a threshold of recession.

So maybe focusing more on the US, Euro area, the UK. First of all, you might expect a little bit more of a modest impact on the US economy because the US is, of course, a substantial oil producer. We looked at some Fed research which suggests, perhaps on the current level of oil prices, more like a 0.8% rise in inflation.

And perhaps a 0.2 percentage point hit to GDP, So a bit lower than those initial estimates. On the Euro area, you'd expect maybe a bigger impact because they're a major oil and gas importer. And again, we looked at some ECB analysis. Maybe then you're looking at more like a 1.5 percentage point hit on higher inflation and three-tenths lower GDP growth.

So, at least these are reasonable starting assumptions. For the UK, then you might get slightly bigger effects again. And perhaps the shock to date could be more like two and a half percentage points higher inflation and half a percentage point hit to GDP. Actually, even in the UK, that's not obviously quite enough to kind of plunge you into recession

but again, you can sort of skirt the edges there — at least a sort of technical recession even with those impacts. But you want to be really careful with any of these sorts of models and impacts. The different approaches are available, other estimates are available, other models, clearly. And I think the other point is, again, coming back to those initial points — if the conflict suddenly calms down, these are going to be overestimates.

On the other hand, with strains being seen in refined products and other things, the impact could end up larger. And clearly the impact also depends on how governments and central banks respond to this Energy crisis — it's a really important aspect. Government subsidies, as we've seen already, for example, in Japan, could soften the impact on consumers.

And if this conflict continues, it wouldn't be surprising at all to see more temporary subsidies, tax cuts, other support programmes to at least support the most vulnerable consumers. Okay, but what about central banks and prospects for rate hikes? So we've now had at least inflation data for March from the Euro area. So here on the right-hand side chart, you can see that local headline CPI line in purple already starting to come up.

And that reflects the initial jump in energy inflation. That's just really the petrol and diesel price impact. I'm sure you've all noticed prices rising quickly at the pump, already very responsive to oil price changes. What central banks will be particularly alert to in coming months is all those other lines — signs of increases in core inflation, services inflation, pay growth, inflation expectations.

It's passing through more broadly. Okay, let's think quickly about the different central banks. I'll put Japan to one side. Before the conflict, I was expecting them to kind of raise rates gradually; I'm still pretty much expecting them to raise rates gradually. Coming into the conflict on the Fed side, the US Fed was expected to cut rates two to three times this year.

The Bank of England were expected to cut rates twice this year. The ECB was broadly expected to keep rates on hold. Now you look at things — markets and price hikes from the ECB and the Bank of England were no longer pricing in cuts for the US. I mean, think about Europe first. I don't think it would be very surprising if we saw what I would call insurance hikes in Europe — by which I mean one to two rate hikes designed to reduce the chance that we get stuck in a kind of higher inflation norm.

All those other lines and that kind of chart going up significantly. I think it's easy to see why central banks worry about inflation persistence — that period of high inflation that we put up with during the pandemic. You can see on the charts there — it's a really fresh memory for us all. And given the price level hasn't fallen back, things still feel much more expensive than they used to.

Then against that backdrop, there are risks that firms just find it easier to pass on higher costs to consumers than pre-pandemic. And so inflation expectations are at risk of rising. And even wage growth in this context —employees may perhaps now be expected to be compensated for cost of living shocks to at least a greater degree than they were pre-pandemic.

So to contain those risks, it makes sense for inflation-targeting central banks to at least consider precautionary insurance rate rises if energy costs don't fall back. In the Bank of England's case, inflation dynamics were stronger — for example in the Euro area, you can see that on the chart — going into this crisis, and worries about inflation persistence were already pretty prominent.

What about the Fed rate hikes? Look, rate hikes at least look less likely in response to this energy shock than they do in Europe. The Fed's dual mandate does put them in a bit of a different position. But even the Fed was already alert to upside inflation risks. And in comments this week, Powell said that the Fed is inclined to look past the energy price shock.

But five years of above-target inflation means that they can't take for granted that inflation expectations won't rise. But for now, the Fed's messaging has been pointing more towards delayed cuts, than hikes. A slide here shows the PMI business surveys which we do have for March. The right-hand side chart there is the PMI business survey indicator for output prices.

So reflecting that businesses are increasingly saying they'll have to raise prices. So you're back in that case for insurance rate hikes again. On the left-hand side, you can already see a general worsening there in the activity indicator. And in the middle you can see the one for employment has deteriorated too. In particular, look at the UK — it was already really quite weak, standing out against other economies.

It's got a little bit weaker. More generally, that is the danger I think — that policymakers focus on fighting the last battle. So again, fresh in their minds is going to be 2022. Inflation rose a lot; sharp rate rises followed. But maybe tightening policy now would reduce the risks of that scenario.

But again, economies like the UK that haven't been growing very much, sitting with soft labour markets, maybe means they're going to have to cut rates. I think rate cuts would look more likely down the line. With that, I'll happily hand over to Trevor.

Great, okay. So I'm going to put this in a bit of longer-term context, but then I'm going to come back to how you might want to think about the various scenarios over the next few weeks as well. So, 'Spikeflation' and the Iran War. If you look at the chart on the left-hand side of your screen — where Mel's charts were for the last five years — this is the last 110 years.

Okay. So slightly more long-term context here. That left-hand chart shows you in purple, US RPI retail price inflation back to 1915. And what I've done there is I've shaded in those vertical grey bars — periods of high inflation. And that turquoise line is the price level. So, you can see sometimes it's rising gradually, as we saw from sort of 1980 to the time of the pandemic.

And sometimes it's rising more steeply, as we saw in the 1970s, as we saw around World War Two and as we saw during World War One. And you can see I've also shaded in the period from the pandemic onwards, and you can see that steeper rise in the price level that we're seeing. So, the point to make about that left-hand chart — certainly in the UK historical record...

In the US — I've looked at Ireland, I've looked at Germany — the major developed economies: high inflation is almost always spiky inflation. When inflation is high it's unpredictable. You don't get 7% followed by 7% followed by 7%. You get 20% followed by 1%, followed by 2%, followed by 15%. And what that's really saying is that high inflation historically has come in the form of price level shocks.

On the right-hand side of the screen, you've got a list of different factors we've been talking about really since the pandemic onwards, of why we think we've moved from a low, stable inflation paradigm to a spiky inflation paradigm. And it starts with the Covid stimulus in the pandemic. So number one on the dial there at the top left — we had wartime levels of fiscal and monetary stimulus.

In a supply-constrained economy, the stimulus was left in place as the economy was reopening, and that resulted in the old-fashioned too much money chasing too few goods, and you got prices rising very rapidly. That played into number two, which is chronic commodity underinvestment. I've been a commodity investor in multi-asset funds for more than 20 years. Most of that time you had excess capacity bearing down on prices and things like the discovery of US shale.

But recently you've had a period of underinvestment, really since the financial crisis, and the fossil fuel underinvestment has been increased by the transition to net zero. So you've had this period of basically tight commodity supply. That means that when you get a demand shock or an interruption to supply, prices in commodity markets can move very rapidly higher.

Then we move on to de-globalisation. That can include everything from Brexit to the breakdown of NAFTA to the tariffs which we're seeing at 1930s levels from America — on-shoring and production capacity, breakdown of trading relations with China as it became a bigger economic and geopolitical power. But we see that all the time: de-globalisation. We've got structural changes to labour markets, which is a bit of a catch-all.

Some of that's demographics — an ageing population. Some of it is actual deportations or threats of deportation in America, which tightens the labour markets, particularly in agriculture and hospitality. You've got massive public spending programmes of all kinds and populism, which makes it really hard to do any kind of austerity or spending cuts. You've got the heightened geopolitical risk, which obviously was part of the spike in inflation in 2022 with the invasion of Ukraine.

And you've got above all of this — and I think probably the most important one — high levels of debt and financial repression. When you've got high levels of debt, both sovereign and private sector debt, it becomes very difficult for central banks to raise interest rates to fight inflation. There's a temptation to let it rip. It's always accidental. We've got inflation targets.

They'll say sorry afterwards, but you can already see it in the debates in central banks: should they raise interest rates now to fight inflation? Or are they worried that everything's so fragile because of high levels of debt — that they should be cutting interest rates. You can already see that debate coming through. In some ways we're back to the 1970s.

So what we're seeing here is oil price shocks. And although people don't put it this way, I'm going to explain it on this slide — how even the Covid pandemic was actually an oil price shock. On the left-hand side, I've got a couple of charts that have been doing the rounds recently. They're a little bit provocative.

On the left-hand side, you can see, first of all, US CPI and then next to it, you've got UK CPI or RPI in the '70s. And what I've done is I've taken the two inflation spikes in the 1970s period of 'Spikeflation', shown in purple. And I've shifted the dates on the recent inflation spike from Covid, which is shown there in turquoise.

So it lines up with '73/'74 and, kind of roundabout, now they would be the second big inflation spike of the 1970s. Now, in the '70s, both of the inflation shocks were oil shocks. You can see in the table there the oil price at the start and the high in the Yom Kippur War. So in August '72, oil was $2.59 a barrel.

It ended up being $11.65 — it went up 4.5-fold. The Iranian Revolution in 1979 that was another big oil shock. Oil started at $12.80, ended at $41 — it tripled. Look at Covid, Ukraine, and this. You have to scratch your head here and check this is actually right. But in Covid/Ukraine it was a bigger oil shock in percentage terms, because during the lockdown oil dipped down to $20 for spot deliveries.

The futures markets at that time actually were trading at negative prices. So there was no spare capacity in terms of storage. And if you were taking delivery of oil, it was very expensive to find somewhere to put it. So you got to $20 a barrel. And then after the invasion of Ukraine, you were at $120 — so it went up six-fold.

Another energy shock. And then we've got this Iran War. We started at about $60 in December; the highest in futures trading for Brent was $118. So that's a doubling so far. Not on the scale of Yom Kippur, the Iranian Revolution, or Covid/Ukraine. But you can certainly see that pattern developing — that this could turn out to be a bigger energy shock.

And we know that the physical markets are trading at much higher prices than these futures markets — the futures markets, because they're the future expectation, are sort of slightly assuming that things don't stay this bad. But if you're trying to take spot deliveries, we've seen prices of $150 or higher.

Inflation spikes are painful for balanced funds. So this diagram looks at a big sweep of history here — looks at the last 100 years or so. On the left-hand side, it looks at the returns from US stocks and bonds. If you're in the bottom left-hand corner, you've got falling stock and bond prices, which happened in 2022.

And on that basis, it looks like it's quite a rarity. Only four times have stocks and bonds in America fallen at the same time as each other in a calendar year. But if you adjust those dots for inflation — look at real returns — there are many times when stocks and bonds fall in real terms. And if you look at the dates, you've got the Yom Kippur War in there, you've got the Iranian Revolution in there, you've got Covid in there. Periods when you get an inflation spike are bad for bonds — kind of obviously — but they're also typically very bad for stocks, especially if there's a recession.

And commodities are going up. So when we look at multi-asset portfolios — either the governed range or our GMAP funds — I'm comparing here the growth portfolio to a sort of typical passive balanced fund. On the left-hand side, you can see a 60/40 fund with really big exposures to US equities, which are quite inflation-sensitive, and to bonds. Whereas our  portfolio's got a bit of balance with more in the UK — a more inflation-resilient, cheaper market.

We've got commercial property, which again is a long-term real asset. And we've got a hedge with commodities. So your first line of defence in this kind of shock is diversification including inflation hedges. That will help protect value in times when a 'Spikeflation' shock hits you. The second line of defence is to be tactical. And this is where the business cycle comes in.

And there's great uncertainty at the moment. We have a daily tactical meeting — we've just come out of it. We're all — as is everyone else — reading the latest pronouncements from the White House and from the Iranians and from the Israelis and trying to figure out what's going on before the shock happens. The investment clock that guides our asset allocation was in the top left-hand corner.

That yellow dot. You see the trail over the last 12 months or so — we were in the top left-hand corner, which is recovery and growth but inflation generally falling. We started the year thinking, actually, the earnings outlook was quite good because the economies were chugging along quite nicely. There were some improvements in business confidence, and central banks felt able to cut interest rates further.

There was lots of speculation about Fed rate cuts. Where are we going next? It's more uncertain, and you can see a bit of a projection there with the inflation rise taking you into overheat. If you've got a recession as well, we go into stagflation. So lots of debate about where we head next. Two scenarios for you.

With parallels again with history. One is Russia/Ukraine 2022 and the other is the Gulf War. When people are talking about three scenarios — just to be clear here — you can split these into as many as you like. But one of them is there's a deal, and it's possible. And if there is a deal and the war ends and you get, I guess, security guarantees for Iran that they believe, they're asking to keep their civil nuclear programme.

They're asking to keep defensive missiles — whatever defensive missiles are. And if the Americans get what they want — the Strait of Hormuz is reopened — and all the things that Iran has said don’t happen, then the markets clearly rally, oil prices go down. It's definitely possible. But it does feel a little bit at the moment that the two sides are very far apart.

And I think it's unlikely that there is a deal. So I'll leave you with two scenarios. One of them is the 'Trump goes home' scenario, which is being talked about. We don't need the oil from the Strait of Hormuz — Trump here is pretending oil is not a global market with global pricing.

Because if the Strait of Hormuz is messed up, it's going to continue to affect gasoline prices in America. But there is that scenario where Trump goes home — some kind of spectacular event, an attack — this weekend, and he says, "That's it, we're out of there. You clear it up." I think in that case, you might not get the oil price moving a lot higher, but you might not get it moving a lot lower either.

You continue to have disruptions and uncertainty. And what you can see on the left-hand graph there is 2022: the turquoise line is the oil price. And the oil price went up and it stayed high for about three or four months. And during that time, of course, it was inflationary. And stock markets shown in purple were declining. So I think you have that possible scenario, or you have something a bit more extreme where ground troops are involved, and that's more like the first Gulf War in 1990.

And stock markets dropped when Saddam Hussein invaded Kuwait in August of 1990, pretty much out of the blue. And you could argue the US-Israeli attack on Iran was pretty much out of the blue — we weren't talking about it three months ago — and then the markets only really recovered when the oil price came back down again, when the war was over. We could be going into something a bit more prolonged like that, where there's lots of volatility in both directions.

But generally markets remain depressed until it's clear that the war is over. The problem we have at the moment is we don't see as clear an ending to this as you had in 1990. There was a United Nations resolution. There was a United Nations coalition. And when Saddam Hussein was back over the border from Kuwait, back in Iraq, the war was called off.

We don't see that same kind of clear ending at the moment, but those are the sorts of scenarios we're talking about. In that scenario where ground troops go in, there's more collateral damage, more lashing out by the Iranian regime at energy infrastructure — possibly a much bigger spike in oil prices. Then you worry a little bit about whether you get a recession.

So if you look historically at these oil shocks — this is the oil price in real terms — you've got here again the '70s: Yom Kippur War, Iranian Revolution; you've got the 1990 Gulf War, the Iraq War; you've got the QE and China bubble, Ukraine invasion, and Iran. All of those — one, two, three, four, five, six prior oil shocks — five of them were recessions.

The only one that wasn't was the Covid reopening. And arguably that was quite a special case in terms of where cash balances were. I'm going to stop there — we've had quite a few questions coming through. We are going to answer some questions.

Yes, perfect. Thanks so much, Melanie and Trevor. The first question we will ask here is: do you think the Bank of England still need to continue to reduce rates to protect the economy, rather than talking about holding or raising?

Yes. In short, I think pre-crisis, I was expecting the Bank of England to cut rates a bit further. And once they are a bit less worried about inflation persistence risks, I think we'll come back to that. Interesting that the question is worded in terms of — or are you thinking about does the bank think need to sort of talk about holding or, or raising rates?

Do they think interest rates talk about that? It doesn't mean you can get markets to do some of the work for you. So you actually need to do less.

Perfect.

Yes. I mean, I sort of joke that central banks have got inflation targets, but they don't use them during price level shocks because it's so painful to create the recession to reverse the increase in prices. So I say it's like dieting between meals. So, the UK inflation level should be up, what, 12% since the pandemic, but it's up 30%.

And my worry is, if there is a big inflation shock again, central banks will give lip service to fighting inflation but they will have to think about the economy as well. And that's where you need to get protection against cost of living increases through things like commodities.

Great. And still looking at the government side of things, do you think that, with government debts high, will they bring in capital controls in the UK or around the world?

Melanie Baker

No, that doesn’t seem likely to me. But look, that said, there are things governments can do — for example, from a regulatory perspective perhaps — that can encourage people to hold government debt.

Melanie Baker

So there are other forms of it — generally what we call financial repression — that can be engaged in if they really want to go down that path. But that's not really my central case.

Perfect. And which scenario are you most planning for — 'Trump goes home' or 'troops on the ground'?

I always think you've got to hold more than one scenario in our heads at a time, right? I think we're looking really at what Trump is doing, not what he's saying. And what he's saying is partly trying to keep markets as positive as possible while they're trading. I think over the long weekend we're going to see some kind of military action.

So I think we're positioned slightly short risk. So we're slightly short commodities — short equities rather, but long commodities. We were very short government bonds at the start of the year; we're now neutral. So we think government bond yields have risen so much that in a kind of 'Trump goes home' scenario, bond yields probably drop a bit; in a 'Trump goes in hard' scenario...

...there's a recession and bond yields probably drop. So we're neutral bonds at the moment. But slightly overweight commodities, underweight stocks — which I suppose is probably somewhere between 'Trump goes home but leaves things messed up' and 'Trump goes in hard and it takes weeks'.

Perfect. And to what extent could geopolitical risk in West Asia drive structural shifts in equity markets? And does this strengthen the case for investing in global funds like the MSCI?

Yes, okay. Well, I think there are structural changes happening. I do think that when this war ends, people will then look back at the US policymaking, and they'll think about the US midterm elections in November. And I think personally it'll be a flight away from the dollar again, which means gold goes stronger. If the dollar's weak, it generally helps emerging markets.

And I think there's a general theme which I believe in — which people are calling the DM-ification of emerging markets and the EM-ification of developed markets. So America's behaving more like an emerging market; emerging markets are in better shape. I think there is a shift towards the EM.

Perfect. And how exposed do you think the markets are to repricing of front-end rate expectations, if cuts are delayed further?

If cuts are delayed further? I mean, I think the question at the moment is will there be hikes, really. So I think a lot of that is now factored in. Obviously, I suppose, in that middle scenario — or the first scenario — the 'Trump goes home but leaves Hormuz mostly messed up' — that's the scenario probably with the most upside for bond yields, because it's inflationary but without an obvious end to it. But I think we're pretty neutral in terms of pricing. We think it's about right.

Perfect. And last question here: how vulnerable are equity valuations if rates stay higher for longer, particularly in parts of the market where earnings expectations remain ambitious — i.e. US tech?

Yes, right. So if we weren't talking about Iran we'd be talking about AI. The US stock market is trading on 40 times its cycle-adjusted earnings. The UK is on 20 times — so the UK is cheaper. It's the buy-one-get-one-free stock market. American equities are vulnerable just because they're expensive. And if at the same time you've got question marks about policy and you've got higher-for-longer interest rates, I think that makes them more vulnerable.

I've often been saying that feels a little bit like in the short term there could be dot-com bubble kind of dynamics around AI — in other words, the internet's a great thing, it's still all around us, but the stocks get too expensive. But I couldn't see what would burst the bubble. You needed higher rates, and this is what could give you higher rates.

So yes, I'd be a little bit nervous about US equities. And we saw the software companies getting hammered even before the Iran War came through. So a little bit nervous about the US generally.

Perfect. Well, thank you so much, Trevor and Melanie. We should wrap up there — keeping to 30 minutes. If we didn't get to your questions today, one of our sales team that you can see on the screen, reach out. Any other queries or questions, please don't hesitate to get in touch with us. And thank you all very much for joining us today.

Thanks, everyone.