Fidelity International’s Multi-Asset team has published their latest views on which asset classes and markets are presenting the greatest opportunities and risks, and this article zooms in on the key take aways.
To download Fidelity International’s full Global Asset Allocation Insights for July 2026: Global Asset Allocation Insights – July 2026
The key insights:
What has changed?
- Energy shock fading: Markets are increasingly looking beyond the Iran conflict as the outlook shifts back towards resilient earnings and growth.
- More constructive on the US dollar: We have moved overweight tactically, reflecting resilient US growth, stronger relative fundamentals, and fading expectations for near-term policy easing after Kevin Warsh’s first FOMC meeting as chair.
What has stayed the same?
- Growth remains resilient: AI investment, earnings strength, and fiscal support continue to underpin the global expansion.
- Equities preferred to credit: Tight spreads continue to limit the attractiveness of credit despite resilient corporate fundamentals.
- Geopolitical fragmentation remains a structural theme: Policy divergence and energy security continue to drive regional dispersion.
What are we watching?
- Energy market: Whether easing supply disruption allows inflation pressure to continue moderating.
- Central bank policy: Whether developments in the Iran conflict allows inflation pressure to ease enough for central banks to become more dovish again.
- AI investment and earnings: Whether strong earnings momentum continues to broaden beyond the largest technology companies.
Best ideas for investment outcomes
Growth
- Japan and EM equities preferred, particularly Korea, Taiwan, and China tech, supported by structural tailwinds, earnings momentum, and attractive valuations.
- Thematic equities related to AI infrastructure, grid upgrades, and electrification remain supported by strong investment and long-term demand.
Income
- Emerging market bonds in select local markets continue to look attractive given elevated yields and commodity-exporting fundamentals.
- Quality income equities provide relative defensiveness and stability, particularly in an environment of higher uncertainty. Dividend growth and strong balance sheets remain key filters.
Capital preservation
- Gold remains a medium-term diversifier; however its behaviour has been less consistent as a hedge during the recent volatility.
- We remain positive on selected real assets, particularly transition materials such as copper, supported by structural demand from electrification, reshoring, and AI demand.
Uncorrelated returns
- Absolute return strategies, driven by active investment decisions and incorporating idiosyncratic sources of risk – particularly those with a focus on tail risk mitigation.
Source: Fidelity International, July 2026. Views reflect a typical time horizon of 12–18 months and provide a broad starting point for asset allocation decisions. However, they do not reflect current positions for investment strategies, which will be implemented according to specific objectives and parameters.
Main image: graphs, jakub-zerdzicki-9PwLeZA-RGc-unsplash
