Executive summary
- Some de-rating forces are unfolding where equity returns are lagging earnings growth, while questions around AI monetisation persist.
- Our Investment Regime Indicator points toward “Goldilocks” and is gradually evolving towards “Late Cycle”; but this is still an environment that is supportive for risk assets.
- A “soft landing” in investment returns is possible, supported by sound fundamentals – namely resilient growth, productivity, as well as firm liquidity and risk appetite factors.
- Contained generalised inflation, and potential oil-price normalisation are other constructive developments.
- Longer-term alpha opportunities remain across AI Diffusion, Disruption, “Winners Take All”, Policy Beneficiaries and Lifestyle-linked themes; while fixed income returns are expected to be anchored by carry, issuer selection and duration management.
- Creative industry leaders led by productivity-enhanced earnings, investment, and sustained demand can outperform. They can be found across varied global sectors and countries.
- Active management, diversification and downside protection remain increasingly important in this current environment.
Our Q3 2026 investment views in a nutshell: hear from our Head of Investment Strategy
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