Like you, we pray for a peaceful resolution to the recent military strikes against Iran. In this unique time, as the Catholic Lenten season coincides with Ramadan, we are reminded that we are united in prayer, especially for the poor and vulnerable who are most affected in times of crisis and conflict.
While we cannot predict the outcome of these military strikes, CBIS would like to share our thoughts on their potential impact on financial markets, which sectors will be most affected, and if CBIS will be making portfolio adjustments.
How Could the Military Action Against Iran Impact Global Financial Markets?
Energy prices are likely to remain sensitive to any indications of supply disruption or constraints on regional infrastructure.
Broader commodity markets may also experience volatility given the Middle East’s role in global production and transport networks.
Periods of geopolitical stress have historically led to near-term flows into perceived safe-haven assets such as U.S. Treasuries and gold.
Which Sectors May Be Most Impacted?
Sectors that tend to be most directly impacted by geopolitical tensions typically have included:
- Energy (oil and gas)
- Defense-related industries
- Transportation (airline and shipping firms)
- Certain commodity-linked businesses
Energy producers may experience earnings sensitivity to commodity price movements, while energy-intensive sectors may face margin pressure if input costs rise. Defense-related companies can see increased investor attention during periods of military conflict. Transportation including airlines may experience selloffs due to the uncertainty behind oil prices and the conflict’s duration and breadth.
While these are the sectors most directly impacted, during periods of extreme volatility, all sectors are impacted.
Rather than making tactical sector shifts in response to headlines, CBIS evaluates exposures within the broader context of diversification, valuation discipline, and long-term return expectations.
What Kind of Portfolio Adjustments is CBIS Making?
Attempting to reposition portfolios based on geopolitical developments introduces timing risk. Therefore, at this time, we are not making broad portfolio adjustments. Most mandates are designed to remain fully invested within their respective asset classes.
Our focus remains on disciplined risk management: monitoring total portfolio exposures, reviewing concentrations in sectors sensitive to energy prices or global trade, stress-testing liquidity assumptions, and adhering to established rebalancing policies.
Disciplined rebalancing is particularly important during volatile periods, as it helps maintain alignment with long-term asset allocation targets and prevents unintended shifts in risk profile.
In Summary
We shared that the military strikes against Iran may increase short-term volatility in energy, commodities, and safe-haven assets, but CBIS is maintaining disciplined, fully-invested portfolios focused on diversification, risk management, and long-term asset allocation.
Geopolitical events create an understandable fear. Fear creates volatility, which can be sharp but is often difficult to predict in duration or magnitude. However, history reminds us that markets have navigated conflict, energy shocks, political upheaval, and recessions while still historically generating durable long-term returns.
As always, we believe that investors should…
- Take a long-term perspective and prepare for increased volatility in the short term.
- Avoid the temptation to time the market.
- Follow a disciplined and consistent rebalancing approach.
We continue to pray for peace and for all those affected by these events. At the same time, we remain attentive to our responsibility to guide investments thoughtfully and in alignment with the Catholic Church.
Please do not hesitate to connect with your CBIS Relationship Manager with any questions. We are here to serve you.
Jeffrey A. McCroy, President & Chief Executive Officer
Thomas Digenan, CFA, Chief Investment Officer
Jeffrey A. McCroy
As President and Chief Executive Officer, Jeff McCroy oversees the firm’s strategy, global operations, and the continued pursuit of Catholic Responsible Investments, ensuring that CBIS remains a trusted partner for institutions seeking to invest with purpose. Since joining CBIS in 2017, McCroy has focused on reinforcing the firm’s heritage of stewardship and long-term perspective, expanding its capabilities to better serve investors around the world. He brings more than 37 years of investment industry experience, including leadership roles in client relationship management, product oversight, and investment firm operations. Before joining CBIS, McCroy served as Head of Global Client Relationship Management at American Century Investments and held senior leadership positions at Transamerica Investment Services, Transamerica Investment Management, and Bank of America Capital Management. He holds a bachelor’s degree from Creighton University.
Thomas Digenan
As Chief Investment Officer, Tom Digenan ensures the Catholic Responsible Investments Team supports investors around the world in the pursuit of competitive financial returns aligned with the teachings of the Catholic Church. He oversees portfolio management, Impact and Justice efforts, and the firm’s responsible investment framework, and serves as Chair of the Catholic Responsible Investments Committee. Since joining CBIS in 2024, Digenan has focused on advancing the firm’s investment capabilities while reinforcing its long-standing commitment to stewardship and disciplined investment management. Digenan brings more than 37 years of investment experience, including senior leadership roles in active equity management, investment solutions, and client-focused portfolio oversight at UBS Asset Management and UBS Global Asset Management, after beginning his career at Brinson Partners and KPMG. He holds a bachelor’s degree from Marquette University, a master’s degree from DePaul University, and is a CFA® charterholder.
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.