Latest investment update

Markets had a strong month in April as investors felt more confident.

One reason was a calmer outlook in the Middle East. Progress towards a possible ceasefire reduced fears that the situation might get worse. While there are still some severe disruptions to shipping through the Strait of Hormuz — an important route for global energy — markets believe the situation could improve over the coming weeks.

This improvement in confidence encouraged investors to take on more risk, which helped share prices rise.

It’s worth remembering that markets don’t need everything to be perfect to perform well. Often, they rise simply because the news is not as bad as feared — and that was the case in April.

Bond markets were more mixed as investors continued to think about what central banks might do next with interest rates.

Most major government bond markets saw small gains. However, UK government bonds fell slightly. This was mainly due to:

• Ongoing political uncertainty in the UK
• The UK’s higher exposure to rising energy prices, which can push inflation higher

Markets expect the UK and Europe to feel the impact of tensions involving Iran more than the US, especially through higher energy costs. Because of this, investors think there is a chance that the Bank of England and the European Central Bank raise interest rates again later this year.

The US economy looks stronger by comparison. Consumers are still spending and the job market remains in good shape.

For long‑term investors, short‑term ups and downs in bond prices are normal. Bonds continue to play an important role in spreading risk and helping to steady portfolios.

Share markets performed very well in April.

Technology and AI‑related companies led the way, as investors grew more confident about their profit outlook. This optimism has been supported by strong company results, with many firms reporting better‑than‑expected earnings.

Emerging market shares were one of the strongest performers, rising by around 15% by the end of April. These markets benefited from improved global confidence and their growing role in global manufacturing and technology supply chains.