CIO Insights 2Q26: Resilience in Chaos
Stay invested, stay diversified.
Chief Investment Office23 Mar 2026
  • Prolonged disruption during crises risks stagflation; brief standoffs will stabilise risk assets
  • Our diversified Barbell portfolio proves resilient; stick to quality equities, bonds, & alternatives
  • Our diversified Barbell portfolio proves resilient; stick to quality equities, bonds, & alternatives
  • Opportunities lie in technology, energy, healthcare & defence-related themes
  • Stay with I.D.E.A. for growth as our strategy has harnessed superior returns since inception
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Dear valued clients,

Historically, the transmission mechanism of Middle East crises to the global economy has been through oil prices. Depending on the severity and duration of the current Middle East war, risk assets will either face further drawdowns if stagflation unfolds or present attractive opportunities if current elevated oil prices prove shortlived.

We advocate that portfolios remain invested and diversified. Our Barbell strategy has demonstrated resilience since inception more than six years ago. Despite substantial drawdowns — averaging 30% peak-to-trough on the Nasdaq — during Covid, the 2022 market meltdown, and Liberation Day, the portfolio has recorded a net annualised return of 8.6%.

We believe this crisis would be no different in terms of its impact on the return trajectory of this strategy. We continue to advocate that portfolios hold income-generating assets on one end, and secular growth equities on the other. Besides opportunities in technology, energy, healthcare, and defence-related themes, stay with I.D.E.A. stocks representing Innovators, Disruptors, Enablers and Adapters – companies that will compound capital in the face of existential risks from AI. We also see opportunities in select Asian and Japanese equity themes.

Most importantly, your portfolios should hold high-quality securities: IG bonds; best-in-class companies that ride secular trends of AI, longevity, scarcity; and, importantly, the non-correlating asset class of gold. Geopolitical uncertainties, alongside the US deficit and dedollarisation, should sustain persistent demand for gold from central banks.

The situation remains fluid. We continue to monitor developments closely and, should conditions deteriorate and the crisis become prolonged, we will increase defensive exposures – particularly to high-grade bonds and gold.

 
Hou Wey Fook, CFA
Chief Investment Officer


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