In this special bonus episode of Fund Calibre’s weekly podcast, recorded amid heightened market volatility, Darius McDermott and Juliet Schooling-Latter explore how escalating geopolitical tensions are reshaping the investment landscape. With energy markets at the centre, they explain why disruptions in the Middle East matter so much for global supply, inflation and interest rates.
The discussion also covers why traditional defensive assets like gold have struggled, what alternatives investors can consider and how portfolios might be positioned in uncertain times.
Finally, they assess whether recent market weakness presents long-term opportunities, highlighting regions, sectors and strategies that could benefit once stability returns.
Why you should listen to the interview: If you’re trying to make sense of fast-moving markets, this interview cuts through the noise to explain what’s driving volatility, how it could impact inflation and rates, and, crucially, what investors can actually do about it in the face of uncertainty.
This interview was recorded on 25 March 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
The Middle East, oil and volatility
“The one thing we can tell you is we don’t know what is going to come next because I don’t think anybody really does know.
“The Middle East, the Gulf, has all this oil and gas, and all the countries that surround it, Iran included, are rich in assets.
“One way or another, all of that oil and gas from the region comes out through the Strait of Hormuz. And Iran is currently saying you can’t go through A) unless you pay a tax, or B) if you are an ally of the US and Israel, you can’t go through.
“A big chunk of the world’s oil and gas is produced in that region, and if it can’t get out, the implications are huge.
“Consequently, oil prices moved from around $70 a barrel to nearly $120. Even as of today, it’s around $95, depending on negotiations and news, but this could change at any moment.
“Markets are reacting quickly, and equity markets across the globe have already seen broad weakness. Asia and Japan are down roughly 12%, the UK around 8%, and the US around 3%.
“Oil affects inflation, inflation affects interest rates, and the narrative has shifted rapidly since the conflict began.”
Inflation and interest rates
“The golden question is: how long will this conflict last, and what’s the impact? The longer it goes on, the more it affects oil prices and future inflation.
“Inflation may not have fully hit the system yet, even if conflict ends soon, but it will have some effect. For instance, the price of fertiliser is tied to oil, and that feeds into food prices.
“Central banks don’t know any more than you or I do. The Bank of England recently held rates firm, which was unanimous, because cutting rates while inflation is staring us in the face would be foolish.
“We are in a position of uncertainty—markets are volatile, the conflict is ongoing, and nobody can predict precisely what happens next. Investors have to position portfolios carefully, because conventional rules may not apply.”
Gold and defensive assets
“Gold’s reaction has surprised us. It had tripled in value over three years, from around $1,600 to over $5,500 at one point.
“The starting price going into this conflict was already elevated. Additionally, the strengthening dollar has negatively affected gold, reversing the trend we saw in the previous year.
Is this 20% fall permanent or short-lived? We don’t know. But it shows that even traditionally defensive assets can behave unpredictably under certain conditions. It’s why diversification matters.
“Gold is liquid. When an event like this conflict happens, investors often take profits, which also impacts price.
“At the margin, gold yields nothing, so if inflation expectations rise, other assets may look more attractive.
“Absolute return funds are designed to give returns regardless of market movement.
“Some funds are even up slightly, for example the Janus Henderson Absolute Return fund, while markets are down. Investing in oil is an option, though volatile.
“The one thing that never goes down is cash. Short-duration bonds can provide protection because they are less sensitive to interest rates and have performed well since the conflict began.
“Short-duration bonds were the only sector actually in positive territory since the conflict began. This demonstrates how different strategies can mitigate risk during periods of market uncertainty
“Investors could also use their ISA allowance and hold cash or money market funds, waiting for more visibility on the conflict before committing to higher-risk investments.
“These approaches allow you to earn modest returns while protecting capital.”
Long-term opportunities
“Emerging markets, Asia, and even Japan have pulled back significantly due to short-term oil-related concerns.
“The US dollar weakening generally benefits these regions, making them 10–12% cheaper. Long-term investors can use volatility to their advantage, but must be prepared for continued volatility.
“India looks interesting over the long term and Japan’s corporate reform story may make it appealing. For some, a global fund is the solution, letting experienced managers allocate capital to quality growth and recovery opportunities.
“Quality growth funds are trading at historically low premiums relative to the broader market. These companies – often in healthcare, food, and essential services – tend to outperform during market wobbles.
“There’s a compelling argument for buying, rather than selling, even amid uncertainty. Balance is key.”
Conclusion: Although uncertainty remains high, the discussion reinforces the importance of staying flexible, maintaining perspective and focusing on long-term goals.
Whether through holding cash, diversifying defensively, or identifying future opportunities, investors are reminded that periods of volatility, while uncomfortable, can also create the foundations for future returns.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
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