September Investment Report: Markets in focus
In this update, we cover the key themes shaping markets and the economy during September.
Key points:
- The US economy continued to grow, supported by company profits and investment in AI.
- Higher energy prices have increased inflation risks and market uncertainty.
- Higher government bonds are creating attractive long-term income opportunities.
- Different investments and regions may perform differently. Holding a broad mix can help reduce reliance on any one area, but it cannot remove investment risk.
Global economic backdrop
The global economy has continued to grow, but the outlook has become less certain. Higher energy prices and tensions in the Middle East could keep inflation higher for longer. This may affect household and business costs. Government spending, business investment and developments in artificial intelligence are continuing to support growth, although conditions differ between countries.
United States
The US economy remains relatively strong. Healthy company profits, investment linked to AI, productivity improvements and supportive government policy are helping growth. There are still risks. Energy is becoming more expensive, the jobs market is slowing and the future path of interest rates remains uncertain, but the wider outlook for growth is still positive.
Europe
Europe is more exposed to higher energy prices, which could put pressure on households and businesses. Increased government spending, particularly in Germany, is providing some support. Growth remains modest, although there are early signs that conditions may be improving.
Share markets
Global share markets were supported by company profits that were stronger than expected. Overall, we are not increasing or reducing our exposure to shares significantly. We currently prefer some markets outside the US. Some shares outside the US are priced closer to their long-term average. This may create opportunities, but it does not mean they will rise in value or remove investment risk.
Fixed income
The income offered by government bonds increased during September. This happened partly because stronger US growth and higher energy prices raised concerns that inflation could stay high.
We are being selective when investing in company bonds. In some cases, the additional income may not be enough to compensate for the risk that the company cannot repay what it owes. Bond values can also fall, particularly when interest-rate expectations change.
Potential risks we are monitoring
- Conflict in the Middle East: Further escalation could push energy prices higher. This could increase inflation and cause investment markets to fall or move more sharply.
- Inflation: Higher energy and business costs keeping inflation elevated for longer.
- Expectations for artificial intelligence: Weaker demand, higher financing costs or investment returns falling short of expectations.
- Company borrowing: Problems in higher-risk lending markets could affect other investments and increase market volatility.
Portfolio positioning
Our positioning remains balanced across equities, fixed income, alternatives and cash. We are maintaining our overall exposure to shares, with a preference for selected markets outside the US. Higher income from government bonds may provide opportunities, while carefully chosen alternative investments can provide further diversification.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest.
This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.
Opinions, interpretations and conclusions represent the views of True Potential Investments at the date of publication and are subject to change. Forecasts are not a reliable indicator of future results.
All data sourced from Bloomberg L.P. (30/09/2026)
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. Registered in England and Wales as a Limited Liability Partnership No. OC356027.
True Potential LLP is registered in England and Wales as a Limited Liability Partnership No. OC380771.
