Webinar Replay: Asset Allocation Outlook 3Q 2026

With real rates driving markets and AI's investment reach expanding into power, industrials, and real assets, where are the best opportunities across equities, fixed income, and alternatives?

Staying Pro-Risk in a Broadening AI Cycle

AI's investment footprint keeps widening, moving well beyond hyperscalers into power, industrials, and real assets. With real rates emerging as a key driver across markets, where are the most compelling opportunities today across equities, fixed income, and alternatives?

In our 3Q 2026 Asset Allocation Outlook webinar, Jeff Blazek, Co-Chief Investment Officer, Multi-Asset, and Robert Surgent, Senior Portfolio Manager and Head of Fundamental Tactical Asset Allocation, Multi-Asset Strategies, shared our latest views.

5 Key Takeaways from the Webinar

1. Earnings support staying pro risk. We remain overweight global equities. S&P 500 earnings are tracking above 20% growth in 2026 and emerging markets closer to 50%, with most markets at or below historic multiples. We see this as a return to a normal regime of higher volatility and dispersion, a shift from the unusually calm markets of the 2010s through 2021.
2. We favor US and EM over Europe. US all cap and emerging markets are our preferred equity exposures. We have moved to a more aggressive underweight in developed non-US markets, largely driven by an underweight to Europe, where ECB hawkishness, soft growth, and limited AI exposure are key headwinds.
3. The Fed stays on hold, with risk skewed to higher rates. We expect no hikes or cuts into 2027, but see more upside risk than downside. Real yields are the level to watch: 2.5% to 2.7% is the first concern level for equities, and 3% would be a bigger problem. With the marginal bond buyer now price sensitive, the reliable negative stock/bond correlation may no longer hold.
4. Diversify beyond bonds. Hedge strategies, now a $5 trillion asset class, topped our audience poll on effective diversifiers. We are also overweight commodities and have added gold, which we see as attractive given high real rates and extreme negative positioning.
5. The AI question is the market's swing factor. The current earnings surge is heavily AI driven. The open debate is whether this is a permanent re-rating of productivity and margins or a one-off that eventually reverts. How it resolves will shape returns, dispersion and where the risks concentrate from here.

To read the full outlook, please click here.