Together with other wealth managers, Paris-headquartered Indosuez Wealth Management outlines its macroeconomic outlook and views asset allocation, highlighting a preference for US equities and emerging market ones, remaining cautious on Europe.
Indosuez
Wealth Management said this week that it remains constructive
on equities, favoring US large-cap technology and emerging market
equities for their diversification benefits and exposure to
artificial intelligence (AI), while being more cautious on
Europe, given its energy sensitivity.
“We maintain a significant exposure to US equities in our
allocations. The resilience of the US economy and its lower
energy dependence continue to underpin the relative
attractiveness of this market compared to other developed areas,”
Adrien Roure multi-asset portfolio manager at Indosuez Wealth
Management, said. “Large-cap technology companies are delivering
solid results, confirming the strength of their business models
as they pursue substantial investments.”
In his view, these companies remain quality assets, endowed with
strong pricing power and innovation capacity, able to sustainably
support earnings growth and the performance of US equity indices.
“Emerging market equities remain a significant component of our
asset allocation approach. Asian markets offer an attractive
diversification profile and privileged exposure to AI via South
Korea, Taiwan, and China,” Roure continued. “This allocation
continues to be financed by an underweight position in Japan,
which faces persistent monetary constraints and a high degree of
energy dependence.”
Derrick Irwin, senior portfolio manager and co-head of intrinsic
emerging markets equity at Allspring
Global Investments also believes that Chinese technology
companies offer a compelling counterbalance for investors seeking
long-term AI exposure, especially as concerns grow over potential
overbuild in US AI infrastructure.
“Chinese AI has absorbed much less capital expenditure and could
prove to be higher-return investments than AI investments in the
US,” Irwin said this week. “We maintain a constructive view on
emerging market (EM) equities heading into the second half of
2026. Unlike a decade ago, when vulnerabilities such as large
current account deficits defined the “Fragile Five,” many of
these economies have strengthened external balances and fiscal
positions. This structural improvement reduces systemic risk and
provides a foundation for a more broad-based equity rally.”
Irwin expects emerging market performance to be driven by
multiple factors beyond AI, including domestic consumption
growth, policy support, and sector diversification. “We see
earnings growth accelerating. Consensus earnings are expected to
rise from approximately 15 per cent in 2025 to more than 20 per
cent in 2026. Flows have begun to accelerate into emerging market
equities,” Irwin said. “Emerging market equities saw $31 billion
in inflows last year and $78 billion year to date. Although flows
have slowed following the Iran crisis, we see room for more than
$500 billion in additional flows into the asset class in the
medium term.”
Dr Luca Bindelli, head of investment strategy at Swiss private
bank Lombard
Odier also kept his moderate pro-risk stance in
portfolios, favoring emerging market equities, emerging market
hard-currency bonds and gold.
Meanwhile, Roure maintains a more cautious approach to European
equities after having reduced his exposure during the spring
rebound. “The region remains particularly exposed to the effects
of the energy shock, with its impact expected to continue
spreading through the economy,” Roure said. “While the weight of
the energy sector may partially support earnings revisions,
weaker growth and restrictive financial conditions could
penalize cyclical and domestic segments, such as small and
mid-cap stocks.” He therefore favors large
capitalizations and themes linked to European strategic
autonomy like renewable energies, defense, critical materials.
Fixed income
In fixed income, Roure believes that the environment remains
complex, leading to a preference for low duration and quality
credit, alongside selective opportunities in emerging market
debt. Within this framework, the firm highlighted that Latin
America stands out with renewed economic importance, driven by
strong commodity exports and dominance in critical minerals,
accounting for a significant share of global lithium, copper, and
silver production. The region benefits from nearshoring trends
and shifting global trade dynamics, with countries like Mexico
gaining from supply chain realignment, while Brazil, Chile and
Argentina attract investment across energy and mining. Combined
with its role in global food security and expanding energy
production, Latin America is increasingly positioned as a
strategic pillar of emerging market allocation, offering both
cyclical support and long-term structural opportunity.”
Macro backdrop
Indosuez highlighted that the current macro backdrop is shaped by
more powerful AI emerging than by geopolitics, supporting a
resilient growth environment despite higher inflation and energy
volatility. While commodity prices remain elevated amid a global
guessing game around the Strait of Hormuz, Indosuez expects
inflation to gradually normalize, with US inflation relatively
quickly easing as tariff effects unwind and oil stabilizes. More
broadly, inflation has become a fragmented story across regions,
with energy exposure, labor markets, and policy driving divergent
outcomes.
Regionally, the US continues to benefit from anchored inflation
expectations and strong AI-driven investment, while the euro area
faces more persistent pressures, prompting precautionary
hikes from the European Central Bank (ECB) in response to
energy-driven inflation, Indosuez continued. Asia remains
resilient with uneven inflation risks, supported by the AI supply
chain but increasingly fragmented across countries. Against this
backdrop, markets are characterized by a marked decoupling
between asset classes and geographical areas, with bonds under
pressure from inflation while equities remain supported by AI
momentum.
Leave a comment