Quarterly Equities and Multi Asset Outlook – Q3 2026

Conundrums and complex choices

In our Q3 2026 Equities and Multi Asset Outlook, Fabiana Fedeli, CIO Equities, Multi Asset and Sustainability, and the investment teams explore current market dynamics, focusing on AI-fuelled equity market concentration and the challenges for portfolio construction. They discuss how active management can help investors navigate these conundrums, and highlight where they see promising opportunities in this complex environment.
 

Key takeaways:

• We are experiencing an ever-increasing concentration in equity market performance, alongside a remarkable rise in the magnitude and velocity of price movements. Companies are winning big, they are winning fast, and there are fewer and fewer of them.
• In fixed income markets, long-dated developed government bonds have not shown the consistent positive performance that would have been expected in the past in response to heightened geopolitical risks and growth concerns.
• Current market conditions are casting doubt on the benefits of portfolio diversification. Diversification remains paramount to building resilient portfolios. It means owning securities with uncorrelated drivers where there is a clear gap between pricing and intrinsic value and where we believe we have a unique perspective.
• At some point, we are likely to have an abrupt change in the narrow market leadership – we need to invest in tomorrow’s leaders when few are paying attention to them.
• While we still like some AI-enablers, we see opportunities beyond the most crowded beneficiaries of AI capex, in themes such as electrification, power infrastructure and enabling industrial technologies, as well as a broader set of AI beneficiaries. Our Multi Asset portfolios currently have an overweight duration position, with a preference for government bonds over credit.
   

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