Issue link: https://info.seic.com/i/1537927
Hot Topics. Uncertainty Reigns, but Resilience Persists Markets grappled with mixed economic data, shifting central bank signals, and political drama, yet ended with surprising stability. Why does it matter? Markets spent the quarter balancing competing narratives: Will inflation stay sticky? Are rate cuts off the table? Is politics now a bigger risk than economics? Volatility spiked as global headlines piled up—from geopolitical conflicts to surprise central bank moves. Investor sentiment was further shaken by political friction in the U.S., including the public fallout between President Trump and Elon Musk, once seen as a key partner in government efficiency (DOGE). What are SEI doing? We continue to focus on fundamentals rather than reacting to short- term noise. Our globally diversified portfolios are built to weather political and macroeconomic uncertainty while remaining positioned to capture opportunities as they arise. We continue to monitor key risks like trade policy, political instability, and inflation dynamics, while staying committed to our long-term strategy designed for resilience across a range of scenarios. Diversification across fixed income and exposure to our Global Managed Volatility fund aims to minimise downside risk amidst market volatility. Israel–Iran Conflict Escalates Tensions between Israel and Iran intensified, renewing geopolitical risk concerns for global investors. Why does it matter? The escalation in the Middle East revived concerns about broader regional instability. A direct exchange of missile strikes followed by U.S. attacks on three of Iran's largest nuclear facilities, highlighted the impact of geopolitical tensions on global markets. Though a ceasefire has since been brokered, uncertainty remains amid the region's complex alliances and strategic interests. Investors are watching for effects on oil prices, global trade routes, and overall risk sentiment. Fear remains around the Strait of Hormuz, which is a key passage for nearly a third of global oil. What are SEI doing? We continue to monitor geopolitical developments for signs of escalation, while staying focused on positioning portfolios to navigate diverse outcomes. Our globally diversified portfolios and exposure to inflation-sensitive assets like commodities and inflation- linked bonds aim to provide resilience. Our approach stays rooted in fundamentals in order to manage risks and seize opportunities as conditions evolve. Michael Allen Senior Portfolio Strategist at SEI shares his views on the topics that investors should look out for in the year to come. Tariff Trouble Returns The global trade landscape shifted sharply this quarter as new U.S. tariffs r e i g n i t e d f e a r s o f e c o n o m i c fragmentation and recession. Why does it matter? O n A p r i l 2 n d , P r e s i d e n t T r u m p announced the largest tariff package since 1930, on over 180 of the U.S.'s largest trading partners. The rollout was messy; with delays, exemptions, and new inclusions creating day-to-day uncertainty. Multinational firms began issuing warnings about potential earnings hits from rising input costs and disrupted supply chains. What are SEI doing? While tariffs have added near-term v o l a t i l i t y , w e e x p e c t f u r t h e r fluctuations as trade negotiations continue to evolve. Despite this near- term uncertainty, we remain firmly committed to our long-term strategy of maintaining globally diversified portfolios. Given the ever-changing nature of the trade environment, we see little reason for large tactical shifts and are instead focused on underlying fundamentals. These are the views and opinions of SEI which are subject to change. They should not be construed as investment advice. 9