The next six months are likely to be set against a backdrop of heightened uncertainty, shaped by ongoing energy crises, volatile policy signals and shifting regulatory landscapes. While short-term volatility persists, the direction of travel for investors is increasingly clear: long-term trends, particularly decarbonisation, the energy transition, digitalisation, and climate adaptation, are more relevant than ever.

After several years of underperformance relative to large caps, US small and mid-cap equities are trading at historically attractive valuations. This valuation gap, which has reached levels last seen in the early 2000s, presents a compelling entry point for long-term investors.

We are approaching the midpoint of a year once again defined by persistent geopolitical uncertainty. In such an environment, portfolio construction is truly put to the test. One of the key lenses used in this context is cross-asset correlation, as it provides a direct read on the diversification benefits investors can realistically expect. The most closely watched relationship in this regard is, of course, the correlation between equities and bonds.