Yes, There’s Still Room to Run
In spite of concerns about AI-related valuations, we believe a strong economy—with monetary stimulus in the pipeline and still more to come—has set the stage for stronger equity performance in 2026.
In the following collection of charts, we a) highlight several potentially supportive macroeconomic and equity-market tailwinds (such as strengthening global industrial activity and modest institutional equity positioning); b) address what we view as some of the important risks to our thesis (including flattening global liquidity and weakening cash flows among AI hyper-scalers); and c) offer tactical portfolio guidance across various equity markets.
Key considerations, in our view, include:
- Size: overweight Small Caps vs Large Caps
- Style: give equal weight to Growth and Value
- Sectors: overweight Technology; stay neutral on Consumer Discretionary; underweight Consumer Staples
- Regions (relative to MSCI ACWI): overweight China and Japan; stay neutral on Europe; underweight U.S. and India
You can now read the full whitepaper at the link below
