The price of oil has jumped considerably in the last few weeks after conflict escalated in the Middle East. At the time of writing the price of a barrel of oil is over $100 whereas at the end of December 2025 the price was around $61.
This has meant not only higher prices at the pumps, but some companies also paying more to manufacture goods and everyone paying higher transportation costs. For consumers it’s higher prices all round as companies will likely pass costs onto their customers.
This article isn’t advice. Investments and any income they produce will rise and fall in value, meaning you could get back less than you invest. If you’re not sure if an investment is right for you, ask for financial advice. Remember, past performance is not a guide to the future.
Will higher oil prices mean higher inflation?
If oil prices remain consistently high the knock-on effect could mean a rebound in inflation. US inflation was on a downwards trend, coming in at 2.4% in February, slightly above the Federal Reserve’s (Fed) 2% target.
However, the Fed is now expecting short-term inflation to be higher following the sharp rise in oil and energy prices, potentially around 2.7% at the end of the year.
The Fed hasn’t rushed any decisions on interest rates though. On 18 March they held interest rates at 3.75% but warned it’s too early to say what impact the war will have on the economy.
Given the current situation, views on what the Fed might do in 2026 are rapidly changing. At that March meeting, the vast majority of the committee did not expect to raise interest rates in 2026. But they have consistently reminded us that they will be led by the data.
How have US stock markets performed?
The US stock market grew 9.74% over the last 12 months to the end of February 2026, with smaller companies outperforming larger peers, returning 15.51%.
It has been just over 12 months since Donald Trump re-entered the White House, where it was expected his pro-market agenda would keep markets trending upwards.
But in April he surprised investors by announcing significant tariffs on some of the US's closest trading partners causing the markets to tumble. After the turbulence, he paused the additional levies to make trade agreements which gave the market confidence to keep rising.
More recently, the market has been volatile as investors continue to scrutinise artificial intelligence (AI) companies – some of the biggest companies in the world.
Money has poured into the so-called winners of AI, seeing some share prices reach all-time highs. But more recently, investors have become concerned that AI could make some companies less relevant. Companies in the software space have been hit particularly hard as many believe AI could easily replace the software many of them use and create.
From a sector point of view the industrial sector was the best performing sector returning 22.55% over the last 12 months. Whereas financials was the worst performing, losing 6.10%.
28/02/2021 To 28/02/2022 | 28/02/2022 To 28/02/2023 | 28/02/2023 To 29/02/2024 | 29/02/2024 To 28/02/2025 | 28/02/2025 To 28/02/2026 | |
|---|---|---|---|---|---|
MSCI North America | 18.99% | 0.93% | 23.63% | 18.53% | 9.74% |
MSCI USA/Financials | 26.01% | 3.91% | 11.32% | 31.76% | -6.10% |
MSCI USA/Industrials | 14.87% | 12.94% | 18.68% | 13.86% | 22.55% |
Russell 2000 | -2.06% | 4.16% | 5.33% | 7.18% | 15.51% |
How have our Wealth Shortlist funds performed?
US funds on the Wealth Shortlist delivered mixed performance over the past year, with some faring better than others.
A year is a short time to assess the skills of a fund manager though. Managers with different strengths, styles and areas of focus will perform differently over time.
Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.
For more detail on each fund, it's charges and specific risks, please see the links to their factsheets and key investor information below.
The strongest performing US fund on the Wealth Shortlist over the last year was Artemis US Smaller Companies. The fund rose 27.31%* over the past 12 months, outperforming the IA North American Smaller Companies sector average which returned 11.89%.
Our analysis shows that managers Cormac Weldon and Olivia Micklem’s stock selection was the main driver of the fund’s impressive returns.
Typically, we expect the fund to hold up better when markets are falling given its quality bias, but it has outperformed when markets rise as well. Stock selection in the technology and industrial sectors have been big contributors to the fund’s strong returns
The fund might not invest in many companies which can increase risk, as each has a larger impact on performance. They also invest in smaller companies which also adds risk.
The weakest performing fund over the past 12 months was Baillie Gifford American, returning -9.66%, behind the IA North America sector average which returned 7.72%. The manager’s stock selection held the fund back, especially in the technology and communication services sector.
This fund was exposed to many of the software companies which got hurt in the recent sell-off including the likes of Duolingo, Workday and The Trade Desk.
You should consider annual performance in the context of a longer time horizon and not in isolation. The manager’s long-term time horizon and the fund’s concentrated nature means performance can be volatile and look very different to the benchmark and peers. They can also invest in smaller companies which adds risk.
While we believe Wealth Shortlist funds have long-term performance potential, they won’t perform the same way at the same time. We think it’s important for investors to build a portfolio filled with managers who have different approaches and investing styles to help generate long-term returns.
Annual Percentage Growth
28/02/2021 To 28/02/2022 | 28/02/2022 To 28/02/2023 | 28/02/2023 To 29/02/2024 | 29/02/2024 To 28/02/2025 | 28/02/2025 To 28/02/2026 | |
|---|---|---|---|---|---|
Baillie Gifford American | -31.73% | -23.08% | 31.44% | 26.82% | -9.66% |
IA North America | 14.54% | 1.09% | 20.82% | 14.81% | 7.72% |
Artemis US Smaller Companies | 1.23% | -5.12% | 13.64% | 5.47% | 27.31% |
IA North American Smaller Companies | -1.13% | 2.58% | 5.95% | 5.40% | 11.89% |