Global Asset Allocation Perspectives
July 2026
To help guide the positioning of Scotia Portfolio Solutions, the Multi-Asset Management team of Scotia Global Asset Management meets regularly to discuss and debate the current macro environment and what it means for portfolio positioning. The following report captures the team’s current views.
Key macroeconomic themes
Global economic themes that are most likely to influence our views on portfolio asset allocation over the next 12-to-18 months.
Growth remains resilient, but inflation has re-accelerated
Global markets navigated a quarter where growth proved more resilient than feared, while inflation reaccelerated and forced investors to reassess how quickly central banks may ease. In both Canada and the U.S., persistent inflation and a more cautious central bank outlook have tempered expectations for near-term rate cuts.
Energy and Middle East risks remain key macro swing factor
The path for bonds and equities will depend heavily on whether oil prices and broader Middle East risks begin to normalize. If supply conditions improve, pressure on inflation expectations and bond yields should ease; otherwise, markets could remain more sensitive to inflation risk and changing policy expectations.
Price, durability and diversification matter
After several years of strong market leadership, the backdrop is becoming less forgiving. Active allocation, broad global diversification and disciplined risk management are more important as regional leadership rotates and U.S. concentration risk remains elevated.
Asset allocation perspectives
Equities
We maintain a modest equity overweight. Growth remains positive, earnings are holding up, and the backdrop continues to support measured risk-taking over a defensive pivot. Global equity markets have continued to push higher, supported by resilient economic activity, the strength and breadth of corporate earnings, and expectations for further profit growth.
Fixed income
Fixed income remains useful for income and diversification, but the backdrop is less friendly than it looked earlier in the year. Bond markets spent the quarter reacting less to growth weakness and more to inflation risk and changing policy expectations. Higher starting yields improve long-run return potential, but price volatility is likely to persist until inflation clearly rolls over.
Canada
We continue to have a neutral view on Canadian equities. Canadian equities are supported by strong earnings growth in the gold and banking sectors, underpinned by higher commodity prices and a steeper domestic yield curve. At the same time, the market remains more exposed to commodity-driven cyclicality and valuation risk should those supports weaken.
U.S.
We continue to have a neutral view on U.S. equities. U.S. equities remain supported by strong earnings growth and ongoing fiscal expansion, including another strong earnings season. However, the index remains highly concentrated in a small group of mega-cap technology names, and sentiment toward specific subsectors can shift quickly.
International
We continue to have a neutral view on international equities. We favour more cyclical international markets that stand to benefit from a positive global backdrop and stabilization in global energy markets. Central bank rate hikes in many regions may have some dampening impact on growth expectations, but the measured approach taken should reduce the risk of a sharp near-term contraction.
Emerging Markets
We have added to emerging markets within the broader equity overweight. In our view, the pullback has pushed valuations below what underlying fundamentals justify, particularly in technology-oriented names that should be less sensitive to an energy-driven shock than more traditional, commodity-intensive sectors. This creates an opportunity to gain exposure to structural growth and innovation in emerging markets at more attractive entry points, while still acknowledging near-term macro uncertainty.
For further information, download the full Global Asset Allocation Perspectives Report.
As of June 30, 2026.
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