INSIGHTS

Energy inflation is no longer just a crude oil story. Crude oil prices have been volatile and elevated since the onset of the Middle East conflict, raising concerns that higher oil prices could keep inflation elevated for longer. But recent moves in energy markets suggest the inflation risk extends beyond crude oil.

Supply shocks may no longer be a temporary disruption. As they become more frequent and entrenched, the risk of second-round effects, where higher costs spill over into broader inflation, is rising. Central banks may need to respond differently.

Systematic, cost-aware tail-risk hedging may support portfolio downside protection while preserving strategic flexibility in volatile markets.

For investors still holding cash allocations, the current fixed income environment may offer a potential opportunity to enhance income without taking on significant interest rate risk.

AI investment enthusiasm is rising, but returns will vary widely. Long-term value is more likely where practical, commercially viable use cases are already beginning to emerge, says Walter Scott’s George Dent.

Watch a quarterly Fund update with April LaRusse: Head of Fixed Income Specialists at Insight Investment.