JUNE 2026 FUNDHOUSE MARKET REPORT
This article has been prepared by Fundhouse and is reproduced by LifeMap Financial Planning for general information. It reflects Fundhouse's views as at the date of publication and those views may change. It does not take account of your individual circumstances and should not be treated as personal financial advice or a personal recommendation.
Economic commentary
In June, we learned that UK consumer prices rose by 2.8% in the year to May, unchanged from the month prior, with higher transport costs and falling food prices balancing out. The Bank of England (BoE) maintained interest rates at 3.75%, reiterating its cautious approach – inflation remains above its 2% target, and lowering rates to help borrowers might further stoke it. Accordingly, the BoE continue to closely monitor risks of higher energy prices (especially around Middle East geopolitics, even if they have eased somewhat from the peak of the Iran War), which would feed into UK wages and costs. Meanwhile, another Prime Minister bites the dust; Sir Keir Starmer’s resignation speech, delivered in the wake of Andy Burnham’s return to Westminster, passed with little fanfare in markets. Although no official coronation is on the cards yet, Burnham is widely seen as the frontrunner to lead the Labour party and the country.
US consumer price inflation rose to 4.2% in the year to May, up 0.5% from the month prior. Despite rising costs already beginning to hurt the US consumer, President Trump remarked that he "loves the inflation", with Republicans making oversimplified comparisons to inflation peaks under the Biden administration. Energy prices continued to be the primary driver, accounting for more than 60% of overall price rises, as the economy grappled with the still ongoing energy shock following the closure of the Strait of Hormuz. Against this backdrop, the Federal Reserve (the Fed) left rates unchanged, as in the UK. Notably, the new Fed Chair, Kevin Warsh, made his mark by changing the Fed’s stance on sharing data – they will no longer give forward guidance on interest rates, depriving bond markets of predictive data that they have relied on
Market commentary
Global equity markets rebounded strongly, recording their best quarterly return since 2020 as equity investors largely shrugged off geopolitical tensions in the Middle East. The AI theme remained a key driver of performance, although market leadership broadened beyond software companies to include the infrastructure providers enabling AI infrastructure buildout. This particularly benefited semiconductor and hardware companies, which make up a significant proportion of the Korean and Taiwanese markets, thereby helping emerging market equities deliver their strongest quarterly gain since 2009. US equities also moved higher as their technology companies continued to maintain ambitious AI-related capital expenditure plans (signalling strong future confidence) and report strong earnings (demonstrating strong demand today), which all supported investor sentiment. In Europe, equities enjoyed some gains as consumer confidence recovered from April lows. In the UK, stocks lagged other regions due to its many commodity-linked companies; Middle East tensions eased somewhat, thereby reducing concerns about supply disruptions and pushing commodity prices lower.
Global bond markets were broadly level across the quarter as markets digested the cautious messaging from central bankers. UK gilts outperformed as more aggressive rate expectations subsided. US government bonds were little changed over the quarter, although they saw volatility as investors reassessed the outlook for Fed interest rate cuts.
Outlook. Attempts at prediction of geopolitics and their subsequent effects on markets remains unwise. In a quarter marked by US military action against Iran and the closure of the Strait of Hormuz, which brought global energy shipping to a halt, stock markets finished strong, buoyed in large part by news of order books in a small number of technology companies. In markets experiencing such skewed concentration of returns despite real-world volatility and risk, it is much better to focus on what is knowable today – valuations – and remain diversified across geographies and sectors. We continue to follow these rules, and believe that our disciplined process is best placed to navigate such market conditions for long-term results.
Fundhouse is the trading name of Fundhouse Bespoke Limited. Fundhouse provides investment management services to professional clients and does not provide financial advice. Importantly, this note does not represent investment advice and any reader should always speak to their financial adviser before making any investment decisions. Please note that the value of any investment may go down as well as up and you may lose capital when investing and the value of your investments may not always increase. Please ensure that you are comfortable bearing financial losses and that you are comfortable taking a long-term investment view of five years or more.
