Asset allocation Tactical Asset Allocation

October 2026 update

Above-trend economic growth and moderating risk appetite continue to warrant a diversified approach to asset allocation. Our framework suggests the economic cycle is approaching an important juncture. The next phase is likely to be shaped by one of two paths: Continued resilience in corporate and economic fundamentals, supporting further upside, or softer growth as global financial conditions tighten.

Our Global Tactical Asset Allocation Model¹ remains modestly overweight stocks relative to bonds. Within stocks, we continue to favor defensive factors and sectors. Within bonds, we maintain an underweight to credit and an overweight to duration. Overall, our positioning remains diversified to hedge growth risks while preserving upside potential.

Get the full story

See what our macro regime framework is telling us - and how we are positioning portfolios in response - in our October 2026 Tactical Asset Allocation update.

Topics include:

• Macro update - Economic growth remains resilient and above trend across most sectors. The Federal Reserve's shift toward tighter policy raises the risk of higher interest rates and tighter financial conditions.
• Markets - Strong corporate earnings, supported by AI-related investment, remain a tailwind for stocks. Rising bond yields, geopolitical risk, inflation, and political uncertainty call for prudent risk-taking.
• Investment positioning - We remain moderately overweight stocks, favoring quality and low volatility, and underweight bonds, using duration to hedge downside growth risks.