- Multi-Asset Portfolio Manager
United Kingdom, Professional
Change
This is a monthly snapshot of Wellington Solutions’ asset allocation views as of July 2026. It covers global equities, bonds and commodities and complements the more detailed analysis we share in our Quarterly Asset Allocation Outlook.
Key*
*Please note that we use a more detailed key in our Quarterly Asset Allocation Outlook.
We maintain our overweight stance on global equities. The backdrop remains supportive, with earnings continuing to drive performance, while liquidity and company fundamentals help offset geopolitical uncertainty. However, we modestly pared back our overweight stance given the disconnect between a re-escalating Iran conflict, with no obvious route to a resolution, and markets remaining near all-time highs. Regionally, we continue to favour emerging markets (EM) over Europe and remain neutral on the US and Japan.
US
We maintain our neutral stance on US equities. While we remain constructive on the US, the opportunity set is becoming increasingly stock-specific, with single-stock correlations near multiyear lows, supporting our neutral stance at present.
Europe ex-UK
We retain our modest underweight view on Europe ex-UK equities. The earnings backdrop remains less compelling than in other regions, while the risk of stagflation appears more pronounced. Elevated valuations provide further support for our modestly cautious stance.
UK
We continue to favour a modest underweight in UK equities. Earnings growth remains subdued and we see few catalysts for a broader re-rating. While UK companies have been targets of overseas acquisitions of late, this takeover activity has been concentrated primarily in mid- and small-cap companies. Given this backdrop, we are still finding more attractive opportunities elsewhere.
Japan
We maintain a neutral view on Japanese equities. While we keep seeing progress on corporate reforms, heightened macroeconomic and yen volatility, alongside elevated valuations, keep us on the sidelines.
Emerging markets
We retain our overweight view on EM equities. EM remains our preferred region within the asset class, with valuations near their most attractive levels of the past decade. Asia technology continues to drive most of the earnings growth, and we retain conviction in AI infrastructure amid ongoing deleveraging in South Korean equities. Looking ahead, we see scope for the rally to broaden, with commodity prices providing a tailwind for much of Latin America.
We maintain our modest overweight stance on global duration. While inflation concerns and a relatively hawkish central bank backdrop may persist in the near term, real yields appear elevated in our view, and we see scope for some compression. We are also finding selective opportunities across regional rates markets, which are reflected in our views.
US
We moved to an overweight stance on US rates relative to Germany. While US inflation and fiscal risks remain in focus, we believe they are largely already reflected in current yield levels. With inflation seemingly stabilising and real yields remaining elevated, we see an attractive risk/reward profile in US duration.
Europe ex-UK
We downgraded our stance to underweight on Europe ex-UK government bonds, reflecting our views on both Germany and France. In Germany, we believe the worst of the growth pessimism is likely behind us. As activity indicators stabilise and the fiscal impulse strengthens, we see scope for upward pressure on Bunds yields over time. In France, more persistent fiscal and political uncertainty remain key challenges ahead, supporting our underweight stance.
UK
We moved to an overweight stance on UK rates relative to France. Both the fiscal outlook and inflation remain focal points in the UK, but we believe current yield levels already reflect much of this risk. Looking ahead, moderating inflation and a more credible fiscal path could provide scope for some of this risk premium to unwind. This supports our preference for UK rates relative to France, where growing political uncertainty and a challenging path to fiscal stabilisation remain key risks.
Japan
We upgraded our view on Japanese rates to a very modest overweight. While uncertainties around monetary and fiscal policy remain, we believe investors are increasingly being compensated for these risks. Domestic demand for Japanese government bonds has also remained supportive, while attractive carry provides an additional buffer.
We still hold a neutral view on credit. Spreads remain tight across investment-grade and high-yield markets. Corporate fundamentals are broadly supportive, but we think current valuations leave limited room for further spread compression, resulting in a more balanced risk/reward profile.
Investment-grade credit
We maintain a neutral stance on investment-grade credit. While all-in yields remain attractive, spreads are still tight, leaving valuations less compelling at current levels.
High yield
We are still comfortable with our neutral view on high-yield credit. While carry remains attractive, spreads have narrowed and we find little value at current levels.
Emerging markets
We hold a neutral view on EM debt. While we are relatively more constructive in our views on the asset class, uncertainty around the energy outlook and tensions in the Middle East warrant caution. We see some attractive opportunities within higher-yielding credits in EMD but note that spreads have tightened back to pre-Iran-conflict levels, suggesting little value at current valuations.
We moved to a neutral stance on commodities, paring back our modest overweight stance on oil. We remain cautious given ongoing geopolitical and policy-driven volatility. We also maintain a neutral stance on gold. While structural support from central bank demand remains in place, the recent range-bound trading environment suggests a more balanced outlook, and we continue to look for more attractive entry points before changing our view.
These asset allocation views are produced by Wellington Solutions, which provides client-centred investment solutions, research and advice ranging from whole portfolio solutions to bespoke single asset class and advisory partnerships. Our solutions platform incorporates expertise across multi-asset, fundamental factor investing and thematic approaches to deliver across a range of client outcomes and objectives. If you wish to discuss your investment challenges, and how Wellington Solutions can help, please contact your Wellington relationship manager or solutions@wellington.com.
Disclosure
For professional and institutional investors only. All investing involves risk. Investment markets are subject to economic, regulatory, market sentiment and political risks. All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment. If the strategies do not perform as expected, if opportunities to implement them do not arise, or if the team does not implement its investment strategies successfully, then a strategy may underperform or experience losses. Past performance is not a reliable indicator of future results and investments can lose value.
This material is prepared for, and authorised for internal use by, designated institutional and professional investors and their consultants or for such other use as may be authorised by Wellington Management. This material and/or its contents are current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management. This material is not intended to constitute investment advice or an offer to sell, or the solicitation of an offer to purchase shares or other securities. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund.
Any views expressed herein are those of the Wellington Solutions, are based on available information and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. While any third-party data used is considered reliable, its accuracy is not guaranteed.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Past performance does not guarantee future results.
The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional or accredited investors only.
Experts
- Multi-Asset Portfolio Manager
- Investment Specialist
Monthly Market Review — June 2026
A monthly update on equity, fixed income, currency, and commodity markets.
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