The W1M Investment Barometer – September 2026

Key takeaways

• Technology stocks drove equity market gains, supported by strong economic activity and earnings.
• Further interest rate rises are expected, though current rates remain normal by historical standards.
• Strong global growth and corporate earnings support a positive outlook for selected equities and real assets.
• Diversification, inflation resilience, and portfolio protection remain essential as markets face ongoing geopolitical and concentration risks.

The summer saw global equity markets regain momentum, led by technology stocks, supported by resilient economic activity and strong corporate earnings results. Bond markets remained cautious about persistent inflation and interest rates rising. The US and Eurozone have seen slight increases in interest rates this month but the Bank of England has not moved its base rate yet. Relatively high levels of government borrowing in some countries, including the UK and US, and geopolitical risks, impacting oil prices & inflation, continue to lead to expectations of further modest interest rate increases in major developed economies. However, as the graph below shows, we are not seeing unusually high interest rates when putting current rates into historical context. The adjustment to more normal interest rates can be painful for consumers, corporates and governments, after a post GFC period of unusually low rates, and that can impact demand, investment and fiscal deficits.

Interest rate "normalisation"

UK long-term bond yield (1729-present)

Source: MeasuringWorth, W1M. Data as at 30th June 2026.

Equities

We have been overweight equities for most of this year; this has been correct despite all the reasons there have been to worry about markets; stock markets have looked through a challenging geopolitical environment. There remains a lot of excitement about “AI” and “hyperscalers”; we remain concerned about “index concentration risk” given around a third of the MSCI ACWI global equity index is now in AI-related stocks, including chip designers and makers. An index with a large number of stocks can be driven by just a few names and therefore not give the diversification having many stocks may imply. Indices can also have very long periods of consolidation, after periods of strong performance.

Passive 60/40 portfolios have endured 6 "lost decades" since 1900; could we be entering no. 7?​

Source: BofA, Bloomberg. As at 31.12.25. Note: 60/40 = 60% S&P 500 real total return and 40% US 10-year bond real total return​

Risk warning: Past performance is no guarantee of future results.​

We look to maintain a diversified and resilient portfolio over the business cycle and continue to find good investment ideas globally; valuations outside the technology sector can look very attractive given strong earnings growth expected around the world this year.

Equities − investment philosophy​

We invest in companies where the market underappreciates the quality of the business. This can either be the long-term sustainability of high returns or the improving fundamentals. We call these “Compounders” and “Improvers”.​

*Based on the holdings in the Global Recommended Portfolio as at 30.06.26. ​

Source: W1M, Google Images. ​

Risk warning: This allocation should be used as a guide only. Differing market conditions may mean the above weightings will decrease or increase tactically. The investments listed are for example purposes and should not be considered as advice or a solicitation to buy or an offer to sell a security.​

Absolute Return and Real Assets

W1M multi asset solutions include investments in real assets, through investments in the energy complex, infrastructure and commodities, to increase diversification and inflation resilience in portfolios. Absolute return focussed investments are included primarily to mitigate volatility but also make a positive return contribution. We are overweight exposures to real assets.

Absolute Return and Real Assets​

Protection Strategies

Even when long-term prospects are good, there can be short-term volatility. W1M multi asset solutions include bespoke protection strategies which aim to mitigate losses when there are sharp market moves. In addition to active positioning within our portfolios, we actively take steps to protect our multi asset portfolios, to be ready for whenever volatility may spike whether that is caused by geopolitical or other issues.

If you expect Volatility, do you have a Protection Strategy?​

How Did it Perform During Covid-19 Crisis?

Actual PS performance vs S&P 500 (TR)

  Back-tested returns in previous crises​

*Inception: 19th April 2016 Data to from 31.12.19 to 31.03.20 ​

Source: Goldman Sachs, Bloomberg, W1M. ​

Figures are calculated on a total return basis, net of fees.​

Risk warning: Past performance and simulated past performance is no guarantee of future results and the value of such investments and their strategies may fall as well as rise. ​
You may not get back your initial investment. Capital security is not guaranteed. ​

Summary

Global growth remains robust, company earnings are expected to be very strong this year, geopolitical risks appear to be subsiding and, as a result,  interest rates are expected to rise only modestly, from current levels, to contain inflationary pressures. In the current market environment, we are overweight our selected equities given corporate profits are strong, underweight fixed income as rates are expected to rise to get inflation back to target levels, overweight real assets for the inflation resilience they add to our portfolios and we implement bespoke protection strategies in case volatility spikes. Risks clearly remain, both in terms of geopolitics and index concentration. The importance of being properly diversified, actively choosing what to own and what not to own, having inflation resilience in portfolios and protection strategies, as we go towards the fourth quarter, is key in our view.

Summary of our views​

September 2026 Asset Allocation Positioning​

*The table shows bond allocations relative to bond composite index​

**Hedging includes gold & Protection Strategy if possible. ​

Source: Morningstar. As at 21.09.26. The weightings are calculated as a percentage of the Waverton Balanced platform model portfolio and the peer group equivalent of Model GBP Allocation 40-60%. MSCI AC World weighting assumes a 60% allocation to equity. The above should be used as a guide only and is subject to change.​

Glossary

Geopolitical risk: The potential impact that political events, international tensions, conflicts, or government policy changes can have on financial markets and investment performance.

Fixed income: Investments, such as bonds, that pay a regular income and return the original capital at maturity. Fixed income assets can be negatively affected when interest rates rise.

Diversification: An investment strategy that spreads money across different asset types, sectors, and regions to help reduce risk and improve portfolio resilience during changing market conditions.