In this environment, the MyFolio team has remained focused on two priorities advisers will recognise as critical: supporting portfolios through short term uncertainty while remaining disciplined around long-term investment outcomes.

In our latest quarterly webinar update, Deputy Chief Economist Luke Bartholomew discussed how the macroeconomic environment has evolved and how markets have responded to recent shocks. Christian Howells, Head of Multi Asset Investment Specialists, then explored the implications for MyFolio portfolios during the first quarter.

Geopolitics back at the centre of market pricing

Geopolitical risk has returned to the forefront of market thinking. The Iran conflict and disruption to trade through the Strait of Hormuz have highlighted the ongoing vulnerability of global supply chains, particularly in energy markets. For advisers, an important point is that market moves have reflected uncertainty and risk premia, not just physical supply disruption. Even where shortages have been limited, volatility has increased as investors price a wider range of potential outcomes. 

Rather than anchoring portfolios to a single geopolitical view, Aberdeen’s Global Macro Research team continues to apply a scenario-based approach. While the central case during the first quarter was for tensions to ease over time, the unusually broad range of potential outcomes reinforced the importance of diversification and resilience within portfolios.

Growth, inflation and a tougher policy trade-off

A defining characteristic of the current environment is the uncomfortable mix of softer growth alongside renewed inflationary pressure. Geopolitical shocks often push inflation higher while weighing on economic activity, complicating the task of central banks. In our base case, global growth through 2026 is modestly weaker than it would otherwise have been, with inflation correspondingly higher. The regional implications vary: 

Implications for diversification

For multi-asset investors, this environment underlines the need to think beyond benchmark-driven diversification. Historical relationships between assets have been less reliable, increasing the importance of deliberate, forward-looking portfolio construction. No single asset provides a solution. Index-linked bonds and infrastructure can play a valuable role, but diversification needs to be achieved across multiple sources of return and risk sensitivity. The focus remains squarely on resilience over the longer term not just short-term views.

How this feeds into MyFolio

The MyFolio range is built on a common, strategic asset allocation framework that uses 10-year capital market assumptions in formulating portfolios. These assumptions are reviewed bi-annually. The process, along with our risk-versus-return optimisation process, is designed to deliver consistent outcomes across risk profiles. Over recent years, several structural changes have been implemented to strengthen diversification: 

These changes have been implemented gradually and with a long-term mindset, rather than as reactive responses to short-term market movements.

Performance and looking ahead

First-quarter 2026 was challenging across markets, with relatively few areas delivering positive returns outside of cash. Against this backdrop, MyFolio portfolios delivered outcomes broadly in line with expectations, consistent with their stated risk profiles.

Looking ahead, geopolitical risk, political uncertainty and inflation volatility are likely to persist. For advisers, this reinforces the importance of setting clear expectations with clients and avoiding disruptive short-term decision-making.

Designed as risk-targeted investment solutions, not ‘trading vehicles’, MyFolio funds support long-term financial plans through disciplined portfolio construction.

If you’d like to catch up on the MyFolio Q1 2026 webinar, you’ll find the recording here. For more information visit our website or contact us.