gaai quarterly snapshot Q3 snapshot august 2026

Global Asset Allocation Insights

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Welcome to the Q3 2026 Snapshot. This publication complements our monthly Global Asset Allocation Insights by providing a deeper analysis of the macro environment and a detailed breakdown of our latest tactical asset allocation views.

The global economy has continued to prove remarkably resilient. Despite renewed geopolitical tensions and a more uncertain policy backdrop, growth remains supported by resilient corporate earnings, fiscal expansion across several major economies, and continued investment in artificial intelligence. Rather than slowing the global cycle, recent events have reinforced an increasingly uneven pattern of growth, with outcomes diverging more noticeably across regions.

Artificial intelligence remains a defining investment theme. What began as a concentrated technology story is gradually broadening into a wider investment cycle, supporting demand for power infrastructure, industrial automation, advanced manufacturing, and selected financials alongside the technology sector itself. We believe this broadening creates a wider opportunity set for active investors while reducing reliance on a narrow group of companies.

Geopolitics nevertheless remains an important source of uncertainty. The conflict involving Iran has entered a more complex phase, and although our base case remains a messy resolution, renewed disruption to energy markets cannot be ruled out. We therefore expect a geopolitical risk premium to remain embedded across commodities and certain financial assets, even as markets increasingly refocus on underlying fundamentals.

Against this backdrop, we continue to favour equities over other major asset classes. Earnings remain resilient, fiscal support continues to underpin activity, and the AI investment cycle is still in its early stages. At the same time, elevated concentration, higher interest rates, and increasing regional divergence reinforce the importance of careful implementation. We continue to favour Japan and emerging markets, while remaining underweight Europe.

Within fixed income, we remain cautious on credit, where spreads continue to offer limited compensation for risk despite resilient fundamentals. Government bond yields are more attractive now, but this is offset by inflation pressure and resilient growth. Policy is beginning to diverge, however, meaning selection will be increasingly important in H2. UK Gilts remain our preferred developed market duration exposure.

Private markets continue to offer attractive long-term opportunities, although careful implementation is becoming increasingly important. Within infrastructure, we see compelling opportunities linked to digital infrastructure, electrification, and energy security, while in real estate we continue to favour high-quality logistics, operational real estate, and assets benefiting from structural demand linked to AI and sustainability.

Looking ahead, we believe the global expansion remains intact, but investors should expect greater regional dispersion, more policy divergence, and a wider range of potential outcomes than earlier in the cycle. In this environment, we believe long-term success will depend less on broad market exposure and increasingly on diversification, selectivity, and active management.

Henk-Jan Rikkerink CIO Multi Asset, Real Estate and Systematic

2 Q3 2026 Snapshot Fidelity International