If interest rates continue to decline in 2026, we believe this could create a more supportive environment for small‑cap companies. Lower borrowing costs tend to benefit smaller businesses more than large multinational companies because they rely more heavily on affordable financing to grow.

For this reason, we are actively exploring whether to introduce a carefully sized allocation to small‑caps within our Medium and Upper Medium risk portfolios in future. This would not be a short‑term trade - rather, it would be a strategic shift to capture an emerging long‑term opportunity, but only if conditions continue to improve.

Global demand for rare earth metals and critical minerals is increasing due to their essential role in technology, electric vehicles, batteries, defence systems, and renewable energy supply chains.

We are currently reviewing ETFs that provide diversified exposure to companies involved in rare earth extraction and processing. This theme is aligned with long‑term structural trends rather than short‑term speculation, and adding it in future may enhance diversification while capturing an important global growth area.

There has been growing speculation that Kevin Hassett, President Trump’s top economic adviser and former Chair of the Council of Economic Advisers, could be appointed as the next Federal Reserve Chair, with a decision expected later in 2026 as Jerome Powell’s term expires in May. While no final decision has been made, Hassett is widely viewed as one of the leading contenders. [cnbc.com], [politico.com]

Hassett has repeatedly stated that the Federal Reserve is “way behind the curve” on lowering interest rates and has argued that the U.S. should be cutting more aggressively. In interviews, he has highlighted that strong growth alongside falling inflation gives the Fed “plenty of room to cut rates” and that he would support significantly lower interest rates if he were in charge.

Markets Expect Him to Be Dovish

Analysts and financial media describe Hassett as firmly pro‑growth and likely to support a much more accommodative policy stance than Powell. Reports indicate he has previously suggested he would pursue larger rate cuts, even 50‑basis‑point moves, if needed. His philosophy aligns with the White House’s preference for materially lower interest rates.

A Fed Chair inclined to cut rates more aggressively typically supports:

·         Equities, especially growth and technology stocks

·         Credit markets, as borrowing costs fall

·         Small‑cap and cyclicals, which benefit more from lower rates

·         Global risk sentiment, given lower dollar funding costs

A Note of Caution - Nothing Has Been Decided Yet

While Hassett has been viewed as a frontrunner, President Trump recently signalled some hesitation, and other candidates remain under consideration. Political dynamics, ongoing investigations into Powell’s earlier testimony, and internal White House debates mean that the situation is still evolving. Multiple reports confirm that a decision has not yet been made, and markets will likely need to wait until later this year to know who will replace Jerome Powell.