Our monthly round up of views from different asset managers
🔭 Equities Still Lead, But the Bond Market Is Changing the Argument
🌍 The Big Picture
August ended with investment houses still leaning towards equities, but with less enthusiasm for taking risk everywhere.
Company earnings have held up well and AI-related spending continues to support profits. At the same time, long-term government bond yields have risen as markets absorb heavy government borrowing, higher energy prices and uncertainty over where inflation settles. That combination explains much of this month’s positioning: own growth where earnings support it, but be careful about long-duration bonds and expensive corporate credit. (BlackRock)
The disagreement is useful. Managers broadly accept the same economic backdrop, yet they are choosing quite different ways to deal with it.
📊 Tactical Asset Allocation views
To keep the report readable on a phone, the detailed five-column table has been replaced by a simpler summary.
| Institution | Risk stance | Main call |
|---|---|---|
| Consensus | 🟢 Mild risk-on | Equities preferred; bond maturity matters |
| BlackRock | 🟢 Pro-equity | Equities over long bonds and long credit (BlackRock) |
| UBS CIO | 🟢 Constructive | Equities plus short/medium quality bonds (Global) |
| Invesco | 🟢 Modest risk-on | Stocks over bonds; duration over credit (Invesco) |
| BCA Research | 🟢 Tactical risk-on | Equities over bonds while growth holds (BCA Research) |
BlackRock — view published 10 August
Equities: Positive, with an overweight to US equities.
Government bonds: Prefers short and medium maturities; underweight long US government bonds.
Credit: Cautious on long investment-grade credit; strategically underweight global investment grade and high yield.
Cash/FX: Not stated.
BlackRock’s argument is strong earnings and higher bond yields aren’t contradictory. AI investment can lift productivity and profits while the huge demand for capital from governments, data centres and infrastructure keeps borrowing costs high.
BlackRock Investment Institute: August views
UBS CIO — view updated 27 August
Equities: Attractive.
Government bonds: Positive on high-quality short and medium maturities; cautious about extending too far along the yield curve.
Credit: Positive on high-quality corporate bonds, particularly shorter maturities.
FX: Expects the US dollar to weaken gradually over the medium to longer term.
UBS takes a more balanced approach than BlackRock. It still likes equities because earnings growth has broadened, but it also thinks today’s bond yields provide worthwhile income without needing to accept the greater price swings found in 20- or 30-year bonds.
Invesco — view published 7 August
Equities: Modest overweight versus bonds.
Government bonds: Overweight duration.
Credit: Moderate underweight.
Cash/FX: Not stated.
Invesco describes the global economy as slowing but still growing above its longer-term trend. That leaves it favouring stocks over bonds, while preferring defensive areas of the equity market. Within fixed income, it favours interest-rate exposure rather than corporate credit because credit spreads remain historically tight.
Invesco Tactical Asset Allocation: August 2026
BCA Research — August view
Equities: Tactical overweight relative to bonds.
Government bonds: Less favoured than equities; separate August research sees limited value in long-duration positions.
Credit: Not stated publicly in sufficient detail.
Cash/FX: Not stated in the current public tactical note.
BCA’s recent work argues that US growth remains healthy enough to support an equity overweight relative to bonds. Its bond team is more wary of long maturities, where yields have risen but don’t yet offer an obvious valuation opportunity.
🧠 What Are the Managers Really Saying?
Earnings still matter more than recession fears
None of these houses is building its main case around an imminent recession. BlackRock expects structural investment in AI and infrastructure to keep profits stronger than a normal late-cycle model might suggest, while UBS continues to see support from earnings growth and economic activity.
That helps explain why equities remain ahead of bonds in most tactical allocations.
The real argument is about bonds
There isn’t a simple positive or negative view on fixed income.
BlackRock worries about long government bonds because inflation uncertainty and government borrowing could keep long-term yields high. UBS likes bonds, but mainly at short and medium maturities. Invesco is willing to hold more duration, while remaining wary of corporate credit.
For a UK investor, this distinction matters. A two-year gilt and a 30-year gilt may both carry the same government name, but they can behave very differently when yields move.
Credit looks less comfortable
Corporate balance sheets are generally in decent shape, but bond investors are receiving relatively little extra yield for lending to companies rather than governments.
That explains why Invesco is underweight credit and BlackRock prefers equities if the aim is to participate in continued corporate earnings strength.
🤔 The Contrarian View
The difference between BlackRock and UBS on bonds is probably the most useful disagreement this month.
UBS thinks today’s short and medium-term yields provide attractive income. BlackRock agrees at the short end but remains wary of long bonds because it believes government borrowing and competition for capital have changed the rate environment for years, rather than months.
💡 DIY Investor Takeaway
- Check the duration of your bond investments. Maturity now makes a large difference to both income and price risk.
- Equities are rising because of earnings and profits. That is healthier than a market rising purely because investors are prepared to pay higher valuations.
- Check your concentration. AI remains a powerful earnings story, but several managers favour spreading equity exposure across more companies, sectors and regions.
- High yields need context. A corporate bond can offer an attractive headline yield while providing little extra compensation for the credit risk being taken.
- Use manager views to test your assumptions. If several large investment houses disagree with part of your portfolio, the useful question isn’t “Should I copy them?” but “What risk are they seeing that I may have missed?”
Institutional asset allocation views are most useful as a monthly check on your long-term plan. They show where professional investors agree, where they don’t, and which risks deserve more attention. They aren’t short-term trading instructions.
© Clearly Investments Ltd. Educational information only. This is not investment advice.
This article is for educational purposes and isn’t personal financial advice. Investments can fall as well as rise, and you may get back less than you invest.
