- Solutions Director - EMEA
Italy, Institutional
ChangeThe 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.
This is a monthly snapshot of Wellington Solutions’ asset allocation views as of November 2025. 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 remain constructive on global equities, though we have modestly de-risked our view into year-end, shifting to a more moderate overweight stance. We continue to see a favourable backdrop for equities, supported by a combination of rate cuts, which extend the cycle, reduced policy uncertainty and resilient earnings. A potentially longer runway for AI-driven investment is another supportive factor. Regionally, we favour diversification through selective relative value positioning.
US
We hold a modest overweight stance on US equities, expecting outperformance driven not only by mega-caps and AI names but also by a broad-based earnings (EPS) recovery. Lower taxes, increased investment, productivity gains from AI, deregulation and easing rates create a favourable environment for a wider range of companies, though elevated valuations in the region remain a key challenge.
Europe ex-UK
We maintain a modest underweight stance on European ex-UK equities. Germany’s higher defence and fiscal spending is likely to have a positive spillover effect on the wider eurozone economy. However, despite an improving macroeconomic backdrop, limited progress on EU-level structural reforms continues to constrain corporate investment, prompting us to keep an underweight stance.
UK
We hold a modest underweight view on UK equities. Looking ahead, slowing growth, persistent inflation and substantial fiscal consolidation present headwinds. The earnings outlook remains subdued relative to other regions, and while limited tech sector exposure keeps being a structural challenge, policy uncertainty also weights on investment and spending.
Japan
We still have a modest overweight view on Japanese equities, on the back of a still very compelling narrative. At the micro level, corporate governance reforms are driving more activism and shareholder engagement, coupled with record-high buybacks and attractive dividend yields. At the macro level, ongoing reflation, reduced political risk and supportive fiscal policy provide a favourable backdrop, reinforcing our overweight conviction.
Emerging markets
We retain a neutral stance on emerging market (EM) equities. While the global macroeconomic backdrop remains broadly supportive for EM risk assets, a lack of conviction on China and India specifically makes it harder to adopt a more constructive view on the asset class overall.
We have upgraded our neutral stance on overall duration to overweight. After the broad-based sell-off, more attractive yield levels and reduced tail risks around further rate spikes provided an opportunity to adjust our view. More broadly, we consider duration as a diversifier within a multi-asset context and continue to see opportunities for relative value trades.
US
We maintain a neutral stance on US rates. Inflation remains sticky and growth resilient, but signs of slowing are emerging, along with evidence of a weakening labour market. Uncertainty around the Fed’s policy transition poses a key risk and given limited conviction on near-term directionality, we prefer to stay neutral for now.
Europe ex-UK
We still hold an underweight view on eurozone rates, expressed through German government bonds. The European Central Bank has already delivered over 200 basis points of cuts over the past year, leaving limited scope for further easing, in our view. Looking ahead, we see potential upward pressure on yields driven by Germany’s fiscal regime shift and unresolved fiscal risks in France, particularly around pension reform and deficit targets.
UK
We think an overweight view on UK rates remains justified, albeit with some pullback at the margin. In our view, markets are still over-punishing the UK fiscal outlook, pricing in worst-case scenarios despite signs of an improving backdrop. With the building of increased fiscal headroom and reduced issuance, the government is taking steps to improve fiscal credibility; as such, we see UK duration as offering compelling relative value.
Japan
We have downgraded our view on Japanese duration from neutral to underweight. In our view, markets are underpricing the likelihood that the Bank of Japan will need to raise rates in response to higher inflation and nominal growth, especially as the now confirmed fiscal stimulus package will support solid growth and add inflationary pressure.
In credit, we have dialled back our modest overweight view to neutral, driven by our shifting stance on EM debt, which we downgraded to neutral. The overall backdrop remains positive for credit and risk assets more broadly, but spreads are extremely tight, leaving a limited cushion in the event of a market sell-off and very little room for upside, at a time of growing concerns around the level of issuance needed to fund AI capex, with the spreads of some companies widening.
Investment-grade credit
We hold a neutral view on investment-grade credit. Spreads remain near historically tight levels, making it hard to justify adding risk to the asset class at this stage.
High yield
We maintain a neutral view on high-yield credit. While all-in yields continue to offer attractive value, spreads are exceptionally tight, making us comfortable with our stance of remaining on the sidelines for now.
Emerging markets
We have closed our modest overweight stance on EM debt. While the macroeconomic backdrop and fundamentals remain supportive, spreads have tightened significantly, particularly in the high-yield segment. With limited upside potential and a more asymmetric risk/reward profile, we have shifted back to neutral for now.
We have retained our underweight stance on commodities, consistent with last month. This reflects our continued underweight view on oil, where we still see scope for downside pressure on prices. In contrast, we hold a neutral view on gold, while remaining constructive on its long-term structural appeal.
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.
Experts
- Multi-Asset Portfolio Manager
- Co-Head of Multi-Asset Portfolio Management and Portfolio Manager
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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.
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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.
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