Global Asset Allocation Perspectives
January 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.
Overall outlook remains positive
Global economic growth continues to be resilient, and corporate earnings momentum is broadening beyond a handful of mega-cap names. Central banks have eased interest rate policy and have room to adjust further if needed.
Artificial intelligence (A.I.) will remain a central theme
A.I. influence will likely expand to a broader range of sectors and companies in 2026. The rapid build‑out of A.I. is facing physical and financial constraints, prompting investors to reassess how sustainable growth may be.
Overall, risks remain and must be carefully assessed
While the risk of recession has receded, stock market concentration, sticky inflation, possible interest rate tightening, uncertain trade policy and escalating geopolitical tensions are risks we continue to evaluate closely.
Asset allocation perspectives
Equities
We continue to hold a positive view on equities relative to fixed income and cash. We expect periodic spikes in market volatility as some concerns remain, but the overall global economy is proving resilient and adaptive.
Progress in A.I. continues to quicken, driving genuine productivity gains and earnings growth alongside elevated valuations.
While inflation remains somewhat sticky, it has moderated meaningfully. There is room for monetary policy to provide a cushion should a slowdown occur.
Fixed income
Our outlook remains positive for the next 12-to-18 months across global fixed income markets. Bond yields remain elevated, providing attractive income alongside the potential for capital appreciation.
With that being said, global rate cutting cycles appear done or at least very close to complete, while labour markets have softened.
Equity markets continue to demonstrate notable resilience, and we maintain our belief that equities in general will offer greater upside potential relative to fixed income.
Canada
We continue to have a neutral view on Canadian equities. The Bank of Canada has delivered substantial easing and is likely done cutting interest rates, limiting stimulus in the near term. CUSMA keeps U.S. duties well below those faced by other countries, providing a relative advantage. Canadian stocks have outperformed, driven by gold miners and banks. Continued outperformance is difficult to forecast.
U.S.
We continue to have a neutral view on U.S. equities. While the pace of policy changes has slowed, uncertainty remains, making it a difficult environment for businesses to operate. Many of the world’s most innovative companies are American and enthusiasm for U.S. mega-cap names has driven valuations to potentially concerning levels.
International
We continue to have a neutral view on international equities overall. U.S. trade policy uncertainty remains a risk to trade-dependent markets. This is offset by compelling valuations and increased fiscal stimulus. Many European and Asian currencies are also undervalued versus the U.S. dollar offering another potential opportunity.
Emerging Markets
We continue to have a neutral view on emerging market (EM) equities overall. U.S. trade related risks have eased as various deals have been made, most notably with China. Geopolitical risks remain. Chinese economic data remains challenged but is offset by A.I. excitement. Outside China, economic growth has been resilient and could benefit from a modest upswing in developed markets.
For further information, download the full Global Asset Allocation Perspectives Report.
As of December 31, 2025.
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