Hello,

May Market commentary, what happened in April?

To put simply, calmer waters, but not plain sailing.

April felt like a step down in intensity after March’s shock and escalation. Tensions in the Middle East eased somewhat following a temporary ceasefire framework involving the US, Israel and Iran, which reduced the immediate risk of disruption around the Strait of Hormuz, a key shipping route for global oil supplies. The agreement remains fragile, but it helped markets move from “panic mode” back towards a more normal focus on earnings, inflation and interest rates.

In a nutshell: investors became more confident in April, shares rose strongly, and markets broadened out beyond a small group of mega-cap growth stocks.

What happened in markets?

Shares (equities): a strong month, with broader leadership

Global share markets delivered solid gains.

• The US, Japan and Europe all rose
• Emerging markets led overall performance
• The rally was more broad-based than recent months:
  • Smaller companies (small caps) participated
  • Economy-sensitive areas (often called “cyclicals”) joined in
  • Performance was not just driven by a narrow group of mega-cap growth and AI-linked stocks

UK shares also moved higher, although gains were more modest than in some other regions.

Bonds (fixed income): quieter, but modestly positive

Bonds had a steadier month than shares.

• Government bonds were broadly flat to slightly positive, as yields stopped rising sharply
• Corporate bonds did better than government bonds
• Higher-yield bonds and emerging market debt were among the stronger areas as investor confidence improved

Property shares / alternatives: a rebound

Global listed real estate rebounded strongly. As risk appetite improved, some of the earlier gloom around growth and policy was priced out.

Commodities: oil firm, gold softer

• Oil edged higher, supported by ongoing supply concerns and a fragile geopolitical backdrop
• Gold slipped as demand for safe-haven assets eased and investors rotated back towards risk assets

Year-to-date: where are we now?

By the end of April:

• Global shares are comfortably positive for the year so far
• Emerging markets, smaller companies and cyclical areas regained ground after March’s setback
• Bonds remain in a tug-of-war:
  • attractive income levels (yields are higher than in recent years), but
  • uncertainty over how long interest rates stay “higher for longer”

Gold’s dip is also a timely reminder: even classic “defensive” holdings can be volatile when market narratives shift quickly.

What we’re keeping an eye on

Middle East developments and oil prices

The ceasefire has reduced immediate downside risk, but it’s far from certain. Oil’s direction from here matters because it influences both inflation expectations and growth sentiment.

Central banks: the Fed and the Bank of England

Both held rates steady in April, but markets are paying close attention to how policymakers respond if energy costs keep inflation stubborn. Whether rate cuts happen later this year, or are delayed, will matter for bonds and rate-sensitive parts of the share market.

Will the market rally stay broad?

April was encouraging because more areas participated, including emerging markets, small caps and cyclicals. The key question: does this continue, or do markets drift back towards a narrow group of mega-cap growth leaders?

Diversification: the lesson that keeps repeating

In just a few weeks we saw:

• a period where energy, cash and defensive assets helped most, then
• a month where risk assets bounced back and traditional hedges like gold lagged

That’s exactly why a properly diversified portfolio across assets, regions, sectors and styles remains so important in fast-changing conditions.

What this means for you?

Here are the practical takeaways:

• Don’t overreact to one month. March and April showed how quickly sentiment can swing.
• Diversification is doing its job. Different assets lead at different times , that’s normal.
• Rates still matter. Bonds can provide useful income, but price moves may remain choppy if “higher for longer” persists.
• Broadening leadership could be healthy. If more companies and regions participate, returns may rely less on a small group of stocks.

Our approach: stay diversified, avoid chasing whatever just worked, and keep portfolios aligned to long-term goals and risk tolerance.

Kind regards,

iPensions Wealth Team

Investment risks

Past performance is not a guide to future returns. The value of investments and any income may go down as well as up This may be partly the result of exchange rate fluctuations) and an investor may not get back the full amount invested. The information, data, analysis, and opinions presented herein are provided as of the date written and are subject to change without notice. Every effort has been made to ensure the accuracy of the information provided, but iPensions Wealth Limited makes no warranty, express or implied regarding such information.

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