Top Questions from our Clients - September 2026

The “Top Questions from our Clients” publication is a monthly periodical that posits the most important questions, answers, and portfolio implications curated from across different regions. The September edition addresses the below topics:

• Question 1: Strong earnings are lifting markets — but is this pace sustainable? Q2 earnings were exceptionally strong and broad-based, but the pace is unlikely to be repeated in 2027 given some exceptional items. However, consensus earnings expectations are still be very healthy, with resilient macroeconomic activity providing support. We remain mildly overweight US equities, while diversifying into select Asian markets and favouring IT, industrials, financials and commodity sectors
• Question 2: What can broaden US equity returns without chasing AI at these levels? The US equity opportunity is broadening as re-industrialisation, AI-driven electricity demand and energy security drive substantial capex across the economy. Industrials, materials, financials and grid infrastructure stand to benefit, while AI remains central through its next phase of diffusion and monetisation. We favour broadening exposure rather than rotating away from AI, with a focus on sustainable earnings growth
• Question 3: Can Bessent’s Treasury buybacks ease pressure on bonds? Bessent’s doubling of long-end Treasury buybacks should improve liquidity and offer support, but it doesn’t change the fiscal outlook or Fed policy. With inflation and fiscal discipline still key concerns, the impact on long-term yields is limited. We like to lock in attractive real yields of medium duration high quality bonds, favouring IG in EM and DM. Alternatively, active management can benefit from volatility
• Question 4: Could US midterms put the tech rally at risk? The data centre debate is becoming increasingly bipartisan, with concerns over electricity costs, grid capacity and local opposition gaining traction. Yet we do not see it derailing the AI rally, given strong earnings, robust demand and financing commitments. We remain overweight AI, prioritising monetisation, and prefer cloud, semiconductor and AI-enabled applications, while favouring grid and utilities
• Question 5: Do South Korean tech stocks offer enough upside to justify the risk? Yes. South Korean tech stocks offer sufficient upside to justify the risk, supporting our mild overweight there. The recent correction has flushed out excess leverage without undermining the AI-driven earnings story. Attractive valuations, tight memory supply and strong earnings growth support the outlook, alongside the Value-Up programme and scope for higher shareholder returns
• Question 6: How much is foreign-government selling adding to US Treasury pressure? Foreign selling has added to Treasury market pressure, but demand remains orderly. In our view, the sell-off has primarily reflected heavy Treasury and hyperscaler supply, while its concentration at the long end also reflects a lack of clarity around the Fed’s policy path. With real yields and term premia elevated, we clip coupons and prefer medium duration in IG corporate bonds while remain neutral on Treasuries