Following the release of Schroders Equity Lens for May 2026, Duncan Lamont, Head of Strategic Research has provided a useful summary of it’s findings.
To view the full May 2026 edition of the Schroders Equity Lens, click here: Schroders Equity Lens – May 2026
Summary of Schroders Equity Lens for May 2026:
- Strong fundamentals are powering equities: Markets are up but valuations are cheaper, thanks to earnings.
- Strong earnings growth has also been the story behind equity returns over the past decade.
- Earnings outlook:
- EM leads the way for earnings growth but 2026 is forecast to be strong everywhere, continuing into 2027 in most markets.
- IT sector earnings are forecast to soar this year, as are energy and materials companies.
- Rapid growth forecast for IT in 2027, but energy to fall back. Diverging trends for EM/US/Japan vs Europe/UK in 2027.
- While the overall picture is one of expensive valuations, EM/UK/European equities are on undemanding valuations relative to next 12-month’s earnings. Smaller companies are on depressed valuations vs larger ones.
- Taiwan has just overtaken China as the biggest market in MSCI EM. Korea on the rise too.
- These are highly concentrated markets. TSMC is 57% of MSCI Taiwan, Samsung + SK Hynix make up 54% of MSCI Korea. These companies are all correlated with the AI trade.
- Consider value equities as a hedge against AI risk, without sacrificing equity exposure.
View the full May 2026 edition of the Schroders Equity Lens here: Schroders Equity Lens – May 2026
Main image: lens, magnifying glass, mj-duford-P_5mirRrg0k-unsplash
