Global equity markets rallied overnight, driven by strength in semiconductor stocks and a pullback in oil prices. The Nasdaq Composite led gains, climbing 1.30%, while the S&P 500 added 0.81%. The Dow Jones Industrial Average was more modest, up 0.27%.

The market moves come against a backdrop of escalating conflict, with US Central Command confirming a second consecutive day of American strikes on Iran. These latest strikes were in response to Iranian attacks on commercial shipping vessels near the Strait of Hormuz, a move that has disrupted traffic through one of the world's most critical shipping corridors.

Commentary from Industry Leaders

The latest UBS Global Family Office Report 2026, surveying 307 family offices globally with an average net worth of USD 2.7 billion, offers a timely read on how sophisticated investors are approaching diversification in the current environment and the findings echo much of what we're seeing in conversations with our own clients.

Private markets remain a core allocation, with alternative assets (private equity, private debt, real estate, infrastructure, hedge funds and other real assets) now accounting for 42% of the average family office portfolio. The report suggests this isn't a story of blind conviction, family offices are becoming more deliberate about how much private exposure they carry and how it's structured, weighing long-term value creation against valuation uncertainty, liquidity constraints and concentration risk. That's a sentiment we share, private credit and alternatives continue to earn their place in client portfolios, but position sizing and manager selection matter more than ever.

Gold's role is also worth noting. It remains a modest allocation, around 2-3% on average but the report points to growing interest in gold as a purposeful diversifier and hedge against geopolitical uncertainty, rather than a headline-grabbing trade. This aligns with how we've been framing gold in recent portfolio discussions which is small, strategic and there for a reason.

Perhaps the most interesting shift is around leverage. Nearly two-thirds of family offices surveyed still use it, but usage has trended down steadily over the past five years as rates rose. The takeaway from UBS is that family offices appear to be prioritising balance sheet strength and downside protection over squeezing out extra returns through gearing which is a philosophy that resonates with our own approach to prudent, long-term capital preservation.

Hedge funds, meanwhile, remain a smaller allocation (around 6%), but over a third of respondents are considering increasing exposure over the next five years, used less as a standalone strategy and more as a complement within a broader diversified mix.

The overarching theme is that diversification isn't being abandoned or dramatically reshaped, but refined through a series of measured adjustments.

Podcast Series

Our partners at Clime Investment Management release a weekly podcast covering the latest market and economic insights.

This week John Abernethy and Leo Economides discuss why Australia's relationship with India could become one of the biggest strategic opportunities of the century, why SpaceX is beginning to challenge Australia's telecommunications industry, the renewed tensions in the Middle East, rising oil prices, America's exploding debt problem and what it all means for investors. 

Click the preview below to tune in.

Economic News 

The IMF has trimmed its 2026 growth forecast for Australia to 1.9% and RBA chief economist Sarah Hunter has flagged that a period of higher unemployment may be necessary to bring inflation back under control, comments that keep the door open to a fourth rate hike this year if inflation doesn't ease.

While Treasurer Jim Chalmers points out Australia is still outpacing every G7 economy bar the US, the broader picture is less flattering, against 30 major economies, Australia ranks just 18th this year and 21st by 2027, with average growth over the next five years tracking at its lowest since 1984 (excluding the pandemic). Separate reports from Deloitte Access Economics and the OECD reinforce the theme, pointing to the longest stretch of sub-2% growth in three decades and stagnant real wage growth.

The underlying message from economists, including those at Barrenjoey and CBA, is that a slowdown is actually what the RBA needs right now, with underlying inflation still running at 3.6%, cooling demand is seen as necessary to bring prices back into balance, since monetary policy can't fix Australia's deeper productivity problem. For households and businesses, it boils down to a trade-off which is accept slower growth now, or risk higher interest rates for longer. Worth keeping an eye on heading into the RBA's next few decisions.

Market Snapshot 

• Australia: ASX up on miners and banks. 

• United States: Dow 0.3%, S&P 500 0.8%, Nasdaq 1.3%. 

• Bonds: US 10-year yield at 4.53% and Australian 10-year yield at 4.87%.  

• Gold: Increased overnight.