One month into the Iran conflict, geopolitical tensions in the Middle East remain elevated, with markets continuing to react to rapidly evolving developments.
Recent weeks have seen significant volatility across financial markets, particularly in oil prices, which have remained elevated and fed into inflation expectations and interest rate outlooks.
While risks have increased, negotiations remain ongoing and there are still signs that a path towards de-escalation remains possible. Markets are currently responding to a wide range of potential outcomes, contributing to the sharp swings in sentiment witnessed throughout March.
Our central expectation remains that this represents a temporary disruption rather than a structural shift in the global economic outlook. While higher energy prices may result in slower growth and higher inflation in the near term, we do not currently expect a sustained move materially higher in interest rates. Importantly, markets appear to have already reacted strongly, and in some cases may be pricing in a more negative outcome than our base case suggests.
OCM Portfolio Positioning
The OCM Portfolios entered 2026 positioned for a more volatile environment, reflecting concerns around elevated market valuations and growing geopolitical uncertainty. Elevated cash levels and a focus on quality, actively managed investments have helped cushion the impact of recent market weakness across both the OBI Volatility Managed and House Strategy portfolios.
During March, we took advantage of a period of market strength to bring forward elements of our planned rebalancing activity, increasing cash levels across the portfolio range. These adjustments form part of our medium-term outlook and are not a reaction to short-term market movements.
Following these changes, cash levels within the tactical OBI Volatility Managed portfolios are now:
- 27% in OBI Balanced Growth
- 21% in OBI Moderately Cautious
Within the House Strategy, total cash exposure is approximately 40%, providing flexibility to respond as market conditions evolve.
At present, we believe the existing asset allocation remains well balanced. Elevated cash levels provide resilience should volatility persist, while also creating capacity to redeploy capital should valuations become increasingly attractive.
Performance and Portfolio Positioning
Markets are likely to remain heavily influenced by geopolitical developments in the near term, particularly the outlook for energy prices and global supply chains. While uncertainty remains elevated, our base case continues to be that the current environment represents a temporary shock rather than a lasting change to the global economic backdrop.
With markets having already adjusted and valuations becoming more attractive in certain areas, we remain constructive on the medium-term outlook. We continue to monitor developments closely and stand ready to act should conditions change materially, but at present we believe portfolios remain well positioned to navigate the current uncertainty while retaining the flexibility to benefit from any improvement in sentiment.
Past performance cannot be used as a guide to future performance and the value of your investment will fall as well as rise in value. You may not get back all your investment and the final value of your investment will depend on the performance of your portfolio. The actual performance of an individual client’s portfolio may differ due to different funds being used and being restricted in relation to certain asset allocations. Performance figures quoted include fund manager charges but exclude adviser, discretionary, custodian and switch charges. Unless stated, income is reinvested into the portfolio. The information contained in in this document is for information purposes only. It does not constitute advice or a recommendation or an offer or solicitation for investment. OCM Wealth Management Limited is authorised and regulated by the Financial Conduct Authority (FCA Registration No: 418826) OCM Asset Management is a trading name of OCM Wealth Management Limited
