- Multi-Asset Portfolio Manager
Ireland, Intermediary
ChangeThis is a monthly snapshot of Wellington Solutions’ asset allocation views as of August 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 modest overweight stance on global equities. The fundamental backdrop remains supportive, but strong market performance so far this year and a less clear-cut macroeconomic and geopolitical environment argue for a positive but measured stance. Regionally, we continue to favour emerging markets (EM) over the UK, while moving to neutral on European equities and maintaining a neutral view on the US and Japan.
US
Our neutral stance on US equities remains unchanged. Questions around the durability of the AI investment cycle have increased, particularly given concerns about circular financing arrangements and reliance on a relatively small number of participants. Higher prospective issuance could also temper returns over the coming 12 months. On balance, we remain constructive on the underlying fundamentals but prefer to express our regional equity conviction elsewhere.
Europe ex-UK
We moved to a neutral stance on Europe ex-UK equities. The region delivered a resilient earnings season, while the macroeconomic backdrop is showing signs of improvement. Together, these developments have reduced the downside risks that previously supported our underweight stance. However, structural challenges and valuation considerations continue to limit the upside.
UK
We retain our modest underweight view on UK equities. The earnings outlook for the large-cap market remains closely linked to the energy sector, while we see relatively few catalysts for stronger earnings growth across the broader market. Despite valuations remaining relatively attractive, the earnings outlook is less compelling than in EM, supporting our continued preference for the latter.
Japan
Our view on Japanese equities remains neutral. Earnings have been strong and progress on corporate reform continues to provide medium-term support. However, heightened fiscal and monetary policy uncertainty, alongside related currency and macroeconomic volatility, could weigh on sentiment, keeping us on the sidelines for now.
Emerging markets
We retain our overweight view on EM equities, while trimming at the margin after the recent recovery. EM remains our preferred region, supported by its exposure to the AI supply chain and a favourable earnings-growth differential relative to other markets, especially the UK. A weaker US dollar and less-hawkish rate expectations provide additional support, but strong year-to-date performance argues for a more measured position size.
We maintain our modest overweight view on global duration. High starting yields and attractive carry support our positive view. We expect yields to move lower over time, but for now our stance is moderated by ongoing uncertainty around oil prices, fiscal policy and long-end supply. Regionally, we still see attractive relative-value opportunities across government bond markets.
US
We retain our overweight stance on US rates relative to Germany. Recent US data has surprised to the upside, but we view this as evidence of stabilisation rather than a renewed acceleration in growth. While fiscal and issuance risks remain relevant at the long end, we believe the bar for a further material sell-off in US rates is relatively high at current levels.
Europe ex-UK
We maintain our underweight stance on Europe ex-UK government bonds, reflecting our views on both Germany and France. In Germany, improving economic data and the gradual fiscal impulse could place upward pressure on Bund yields over time. In France, limited prospects for credible fiscal consolidation and persistent political uncertainty inform our underweight view.
UK
We still see merit in our overweight stance on UK rates relative to France. Both markets face fiscal challenges, but we believe UK gilt yields already reflect a meaningful degree of fiscal uncertainty. While challenges around budget execution and issuance remain, the UK has a clearer potential path towards fiscal stabilisation than France, where continued political fragmentation and upcoming elections limit the prospects for credible consolidation.
Japan
We retain a very modest overweight view on Japanese rates. Fiscal and monetary policy uncertainties remain, but we believe that the significant repricing in yields increasingly compensates investors for these risks.
We maintain a neutral view on credit. Spreads remain tight across both investment grade and high yield. Without a clear catalyst for a deterioration in defaults, we see limited rationale for an underweight. At the same time, current valuations leave little room for further compression, resulting in a balanced risk-reward profile.
Investment-grade credit
We maintain a neutral stance on investment-grade credit. All-in yields remain attractive and fundamentals are resilient, but spreads are tight and offer limited room for further compression.
High yield
We maintain a neutral stance on high-yield credit. Carry remains supportive and we do not see a clear deterioration in defaults, but tight spreads leave limited value at current levels.
Emerging markets
We retain a neutral view on EM debt. While tight overall spreads limit the appeal of the broader asset class, dispersion across the market creates selective opportunities among higher-yielding credits. Overall, however, valuations are not compelling to justify an overweight stance.
We maintain a neutral stance on commodities, being neutral on both oil and gold. In oil, near-term supply constraints and geopolitical risks could support prices, but the prospect of stronger supply and potential medium-term surplus limits the case for a more positive view. For gold, central bank demand continues to provide some support, but buying has become less consistent and gold ETF flows have weakened. We’d look for clearer alignment in demand before becoming more constructive.
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 — July 2026
A monthly update on equity, fixed income, currency, and commodity markets.
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