Over recent weeks, tension between Russia and the Ukraine has escalated as Russia built up their troops and weapons on the Ukraine border. This has escalated into Russia moving troops into areas within the Ukraine.

Western leaders have responded with a range of sanctions. Further sanctions are promised to try to deter further aggression.

Financial markets have responded to the invasion of the Ukraine, with oil and gas prices rising over recent weeks. Moves across equity, interest rates and currency markets over the same period, however, have been more measured.

This escalation in risk is on top of investor risk appetites already being tested in an environment of higher global inflation and uncertainty about global interest rates.

Geopolitical developments, such as the unfolding situation in the Ukraine, can be a disruptive influence on investment markets. Whether their influence on markets will continue beyond the short term usually depends on their potential to affect growth, inflation and interest rates. The situation is being monitored.

For example, if the developments remain localised to the Ukraine-Russia, the influence on global markets is unlikely to exert the kind of influence mentioned above. However, it’s worth noting that Russia is a major oil producer and is strategically significant as a gas supplier within Europe so any further escalation of the situation and sanctions could potentially increase pressure on energy prices and headline inflation data, at least in the short term.

We continue to monitor the situation in the Ukraine and the broader economic and market developments that could result. We are keeping well informed of any implications for our investments. At this time, we have not made any changes to the strategic investment strategy we have in place.

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