Global Asset Allocation Perspectives
April 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.
Outlook remains positive, but uncertainty looms
Global economic growth and corporate earnings continue to be resilient. The key uncertainty is how long the Strait of Hormuz disruption persists and how central banks choose to combat the inflationary pressure of the supply-driven energy shock.
The trajectory of conflict in the Middle East
A ceasefire could swiftly reverse the commodity shock and restore central bank rate cut optionality; escalation or long-term closure of the Strait of Hormuz would materially alter the inflation and growth outlook.
Artificial intelligence (A.I.) remains a central theme
A.I. influence will likely continue to expand. With the Magnificent 7 collectively committing ~US$650 billion to A.I. infrastructure, this upcoming earnings season will test whether this investment is adding real value.
Asset allocation perspectives
Equities
We continue to hold a positive view on equities relative to fixed income and cash. While geopolitical conflict has pushed energy up, stocks lower and bond yields higher, our view is that markets have priced-in a negative scenario that may prove temporary. We feel the long-term cash flow outlook for many companies and governments is largely unchanged at this time.
There is an opportunity to selectively add to European and emerging market equities that have recently sold off the most despite resilient underlying fundamentals.
Fixed income
While we continue to hold a positive view on fixed income overall, we maintain our belief that equities in general will offer greater upside.
Since the onset of conflict in the Middle East, energy prices have driven yields higher, echoing 2022. With starting yields higher and monetary policy far less accommodative, energy shocks are less likely to entrench inflation, improving the case for bonds.
Against this backdrop, we see an opportunity to add long duration exposure.
Canada
We continue to have a neutral view on Canadian equities. Higher commodity prices and a steeper yield curve have supported strong earnings growth in the gold and banking sectors. Overall, these dynamics provide a solid but more volatile backdrop and helps differentiate Canadian equities from peers that are more susceptible to weak consumption or have less favourable commodity mixes.
U.S.
We continue to have a neutral view on U.S. equities. Strong earnings growth and ongoing fiscal expansion remains supportive. Valuations have come down and are now much more reasonable, even as concentration remains high. Still, sentiment towards specific subsectors can sour quickly, as illustrated by the recent selloff in Software as a Service companies amid fears of A.I. driven disruption.
International
We continue to have a neutral view on international equities overall. We favour more cyclical international markets, particularly in Europe. France, Italy, and Spain offer stronger earnings momentum and better sentiment at cheaper valuations relative to more defensive markets like Switzerland, while remaining closely linked to key drivers of Eurozone growth.
Emerging Markets
We continue to have a neutral view on emerging market (EM) equities overall. The recent sell-off provides an opportunity to gain exposure to EM structural growth and innovation, particularly in tech-oriented names that should be less sensitive to energy-driven shocks, at more attractive valuations while still acknowledging near-term uncertainty.
For further information, download the full Global Asset Allocation Perspectives Report.
As of March 31, 2026.
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