The outcome of the war in Ukraine remains highly uncertain, while OPEC+ production curbs, supported by Saudi Arabia and Russia, have raised tensions with the US. Elsewhere, the US is seeking to curb Chinese access to global semiconductors, fabrication equipment, and talent. These sources of tension underscore an increased focus on security and supply chain resilience over price and efficiency.


Ukraine's recent counteroffensive has drawn Russian threats of asymmetric escalation.


  • Ukraine has reclaimed at least 8,400 km2 of territory; Russia has retaliated with strikes on Ukraine's cities and energy infrastructure.
  • Russia and OPEC+ partners in October agreed to significantly curb oil production ahead of the US midterm elections.
  • The war has dislocated global energy and food trade, and highlighted national and corporate vulnerabilities to both cyber and physical attacks.

The US is seeking to limit China's access to global semiconductor technology.


  • The Philadelphia Semiconductor index fell 8.4% in the week ending 14 October, following new US curbs on Chinese access to semiconductors and equipment.
  • In a major escalation, US persons now face restrictions working or aiding the Chinese semiconductor sector.
  • Bloomberg reports the Chinese government held emergency talks with its domestic chip industry to understand the damage.

Both dynamics highlight the need for defensive positioning and geopolitical hedges.


  • Both the war in Ukraine war and escalatory US-China measures may continue to drive market volatility in the months ahead.
  • We maintain our preference for both energy equities and oil, with the latter an effective hedge against geopolitical tensions.
  • We recommend several defensive portfolio positions, from healthcare equities and high-quality bonds to safe-haven currencies.

Did you know?


  • Before the war, Russia accounted for roughly 40% of EU gas imports and 25% of oil imports. It is also a leading exporter of wheat, corn, and fertilizers.
  • US companies account for 41% of the global semiconductor production equipment supply chain, according to the Boston Consulting Group, compared to 5% or less for Chinese firms.

Investment view


Russia’s invasion of Ukraine will have longer-term consequences for governments and businesses as they increasingly value security and stability over efficiency and price. US efforts to target China's semiconductor sector will impact global capex and reshape supply chains. Read more in the era of security and defensive positioning.


Main contributors - Jon Gordon, Daniil Bargman, Sundeep Gantori, Christopher Swann


Content is a product of the Chief Investment Office (CIO).


Original report - How can I manage geopolitical volatility?, 31st October 2022.