Our multi-asset investment views – April 2026
We were correct to maintain our overweight position in equities through the geopolitical uncertainty of recent weeks, but we need to acknowledge that the disruption to energy supplies is likely to be more persistent than was originally thought when the conflict in the Middle East began. At the same time, corporate earnings have proved to be resilient and, when we model the impact of higher energy prices, there is significant regional divergence, with the US being relatively unaffected while Europe and Asia are more vulnerable.
Last month, we took profits on our broad commodity exposure when energy prices spiked. The situation in the oil market continues to be highly binary and driven by geopolitical events. It is therefore very difficult for us to take a view at this level of prices. Recognising the risk of more protracted disruption, we decided to establish a long position in agricultural commodities, where prices have not responded so far, seasonal weather effects support demand / supply dynamics, and higher energy and fertiliser prices would have a lagged effect. We reiterated our long position in gold; although we acknowledge that its correlation to equities has increased, we continue to believe that it offers a better defensive exposure than government bonds given our concerns about long term debt sustainability.
After the rapid repricing in rate expectations, bond valuations based on our fair value model are no longer expensive, removing a key driver behind our negative stance on government bonds over the past six months. At the same time, the macro risk distribution has evolved. Whereas previously our risk scenarios were heavily skewed towards inflation with virtually no risk of recession, we now see a more balanced trade-off between inflation and growth. Against this backdrop, we have closed our short government bond position. Within regions, we maintain our underweight position in US bonds, where the economy remains relatively more resilient, but upgrade European bonds, specifically BTPs, where we view current rate hike expectations as overly aggressive. We believe the carry cushion is large enough to help absorb ongoing volatility, particularly as macro risks are now more balanced than before. We remain underweight investment grade bonds in the US as current spreads offer little protection against the potential stagflationary risks and increasing issue.
Equity valuations have improved slightly as prices have not kept up with earnings. Given uncertainties related to geopolitical and technological disruption, we think this de-rating is appropriate but expect further gains from equities driven by earnings. We continue to have bias towards the US and technology as earnings trends are most supportive here. In order to diversify our risk, this month we also add to UK and Canadian equities given their higher exposure to the energy sector.
We downgrade the US dollar from positive to negative, reflecting the relative dovishness of the Federal Reserve (Fed). We remain positive on local emerging market debt and have upgraded the yen.
All in all, our central scenario is still one of positive nominal growth, supported by government spending and strategic investment in defence and the resilience of supply chains. This leads us to still favour equities although we have reflected the increased risks posed to growth from disruption in the Middle East by neutralising our underweight position in government bonds and going long agricultural commodities and energy-related equity markets.
🟢 Long / positive
🟡 Neutral
🔴 Short / negative
🔼 Up from last month
🔽 Down from last month
Main Asset Classes
🟢 Equities
We maintain our positive view on equities. We are being selective in how we express our view with positive views on the UK, Canada, selected US technology, Korea and Taiwan.
🟡🔼 Government bonds
Our upgrade to neutral reflects a more balanced macro backdrop where inflation risks remain but growth concerns are beginning to emerge.
🟢🔼 Commodities
We have upgraded to positive, mainly due to increased agricultural supply risks. We reopened our gold position after taking profits earlier this month, as central bank demand remains strong.
🔴 Corporate bonds (credit)
We remain negative, specifically on US IG, as valuations offer little protection against stagflation. With spreads tight, there is little buffer against rising volatility and increasing private credit risks.
Equities
🟢 US
We are optimistic about US equities, supported by strong earnings revisions and anticipated rate cuts. With valuations having re-set, we maintain a positive outlook on US technology, which remains driven by earnings.
🟢🔼 UK
We have upgraded to positive as the UK provides cyclical and value exposure through sectors such as energy, materials and financials. Prolonged elevated oil prices support energy sector earnings.
🟡 Europe ex UK
We remain neutral as there is an unfavourable mix of growth & inflation, and greater stagflation risk from the energy shock to the region.
🟡 Japan
Despite improving domestic growth and firmer inflation being supportive, our neutral view remains unchanged due to ongoing Bank of Japan (BoJ) policy normalisation and a more uncertain global backdrop limiting conviction.
🟢 Global Emerging Markets (EM)1
We continue to be constructive on EM, particularly in Asia where markets benefit from technology exposure or attractive local rates.
🟡 Asia ex-Japan: China
We remain neutral - export performance has improved, but weak domestic demand continues to weigh on sentiment.
🟢 EM Asia ex China
Short term volatility aside, we retain a positive view as long-term demand for AI hardware remains supported by strong structural growth drivers.
1Global Emerging Markets includes Central and Eastern Europe, Latin America, and Asia.
Government bonds
🔴 US
We remain negative on US Treasuries. The potential for energy prices to remain high combined with solid growth create upside risk for yields.
🟡 UK
We remain neutral on gilts. The rise in oil prices caused by the Middle East conflict has reduced the likelihood of previously anticipated rate cuts by the Bank of England.
🟡 Europe
We retain a neutral stance on European government bonds. As one of the main importers of Gulf oil, the region is vulnerable to energy price rises.
🟡 Japan
We remain neutral while the Bank of Japan cautiously progresses towards policy normalisation. Although strong domestic conditions allow for a slightly hawkish approach, concerns over global financial shocks appear to be tempering its stance.
🟡 US inflation-linked bonds
The Fed’s more hawkish tone in response to rising energy prices, has helped to anchor inflation expectations, though risks remain if the economy remains resilient.
🟢 Emerging markets local currency bonds
Strong returns, steady income, and solid fundamentals in several regions help counter inflation and commodity risks.
Investment grade credit
🔴US
Spreads remain narrow given stagflation risks. Public credit fundamentals are solid, but rising concerns about AI disruption and private credit spillovers are increasing pressure on the sector.
🟡 Europe
We remain neutral as European IG has a greater exposure to financials, where balance sheets remain strong, and the market has a lower duration exposure.
🟡🔼 Emerging markets USD
We upgrade to neutral. EM spreads have widened steadily, especially in the Middle East, meaning the spread buffer means we are now less negative outlook. LatAm issuers remain largely protected from the conflict.
High yield bonds (non-investment grade)
🔴 US
The combination of tight spreads, rising sensitivity to financing conditions and increased vulnerability to a growth slowdown leaves the sector unattractive on a risk-reward basis.
🔴 Europe
We remain negative, with valuations expensive, weak European growth momentum, ongoing energy and inflation sensitivity, and tight financial conditions.
Commodities
🟡 Energy
Developments around Iran continue to dominate energy markets. Volatility is likely to remain high, but limited visibility on the geopolitical outcome makes it difficult to have any conviction on the direction of the next move.
🟢 Gold
We maintain a positive view as the structural outlook is robust due to central bank reserve diversification, a declining appetite for dollar assets, and sustained demand from China and official buyers.
🟡 Industrial metals
The conflict is expected to reduce demand and put pressure on base metals, except aluminium, where supply issues are not yet reflected in prices. Therefore, we maintain a neutral outlook.
🟢🔼 Agriculture
We have upgraded our view to positive. Irrespective of the outcome of the Iran conflict, grain and soft commodity supply chains face ongoing strain from rising fertiliser costs, which have yet to be fully reflected in prices. This will likely drive medium-term price increases.
Currencies
🔴🔽 US $
We have downgraded to negative. After benefiting from the recent surge in energy prices and the unwinding of speculative short US dollar positions amid the risk-off conditions, we expect that a normalisation in volatility will re-ignite a weaker dollar regime.
🟡 UK £
We remain neutral as the weak macro backdrop, fiscal constraints and the Bank of England uncertainty limit upside potential.
🟡🔼 EU €
We have upgraded the euro to neutral as negative factors have eased. However, the rebound in EUR and EU assets has lagged the US, indicating lingering economic concerns for the region. Expectations of a hawkish shift from the ECB are rising due to rising inflation.
🟡 CNH ¥
Although China's balance of payments has improved and the current account is resilient, the currency is fairly valued and has a low level of carry, resulting in us retaining our neutral stance.
🟢🔼 JPY ¥
Japan's strong inflation, above-capacity growth, and severe labour shortages support a hawkish BoJ and a stronger yen, reinforced by robust Shunto wage negotiations – resulting in our more positive view.
🟡Swiss franc ₣
While defensive properties are supportive, low carry and intervention risks constrain the opportunity.
Source: Schroders, February 2026. The views for equities, government bonds and commodities are based on return relative to cash in local currency. The views for corporate bonds and high yield are based on credit spreads (i.e., duration-hedged). The views for currencies are relative to the US dollar, apart from the US dollar which is relative to a trade-weighted basket.
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