"The conflict in the Middle East, including its implications for global inflation and interest rates, reminds us that longer-term thematics are rapidly reshaping the investment landscape.

Portfolio management must adapt from a regime of globalisation and relatively benign conditions since the Global Financial Crisis to a market environment characterised by increased polarity, regionalism, supply chain disruptions, government spending on defence, energy security and infrastructure, and material technological and structural changes, including from the implementation of artificial intelligence.

Despite significant macroeconomic headwinds, elevated valuations and momentum in new technologies have contributed to continued, and somewhat perplexing, strength in equity markets. This underscores the case for staying invested through periods of volatility.

Amid elevated volatility and persistent uncertainty in global markets, State Investments is focused on resilience and diversification of portfolios via active, uncorrelated strategies offering attractive risk-return profiles. Portfolio construction must not only prioritise diversification across asset classes and geographies, but look through allocations to holistically consider underlying risk and return drivers to ensure a dynamic, well-balanced, and long-term portfolio."

Allison Hill, QIC State Chief Investment Officer