Latest investment update

It was a positive start to the year for investors with markets showing the same promising signs it portrayed throughout most of 2025. But it wasn’t easy. 

Events in Venezuela and Iran put pressure on oil prices, and comments from the US about buying Greenland sparked talk of potential tariffs on European countries but didn’t materialise.

While these stories made waves in the news, they didn’t cause lasting damage to markets. Investors quickly shifted their attention back to the data – and those were mostly encouraging.

• US inflation came in lower than expected at 2.6% for the year to December.

• Manufacturing activity picked up too, with the key industry index rising to its highest level since 2022.

• Company results kicked off in January covering the final quarter of 2025 and were broadly positive.

All of this helped offset the short term noise created by geopolitics.

Jerome Powell’s term as Chair of the US Federal Reserve (Fed) ends in May and discussions have started about who could fill the vacancy. President Donald Trump has nominated Kevin Warsh, a former Fed Governor, to take over.

Warsh has voiced his opinion that he’d prefer to keep interest rates higher for longer to help bring inflation back down to the Fed’s 2% target. While this might not be great news for businesses in the US, if rates take longer to come down, it shows that the central bank is happy with the strength of the economy and doesn’t feel like it needs to take action. 

The final decision of who’ll take the role rests with the US Senate.

Last month, the experts at Coutts, the bank behind NatWest Invest added gold back into our funds. This is mainly to help diversify our exposure, especially at a time when shares and bonds have been moving more in sync with each other than usual. The price of gold has rallied over the past 12 months as investors flocked to the precious metal as a safe haven. While it’s value has been steadily climbing, it’s the diversification qualities of gold that makes it attractive to add. 

The investment team also increased our exposure to emerging market shares. Our view is that the global economy is gradually shifting into an expansion phase, and emerging markets – particularly technology companies in South Korea and Taiwan – are well positioned to benefit.

Overall, we remain positive on equities compared with bonds, given the potential for better long term returns. At the same time, we’re keeping sensible protections in place through diversification tools such as bonds and now gold.

Here you’ll find our previous investment market updates.