Walter Scott & Partners Ltd. | 2026 investment outlook: Global and International equities

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[Walter Scott & Partners Ltd.]

[2026 investment outlook: Global and International equities Renaissance Global Growth Fund & Renaissance International Equity Fund]

[Featuring Murdo MacLean, Client Investment Manager Walter Scott & Partners Ltd.]

My name is Murdo MacLean. I'm a client investment manager at Walter Scott, Edinburgh based investment management firm with over 40 years of experience. I've been at the firm for approximately 20 years. Roughly half of my time spent at the coalface picking stocks for the various strategies, and the latter part of my career being more client facing in nature and predominantly covering the Canadian clients.

Just looking back over the course of 2025, certainly we sort of volatility there still remains a fair bit of uncertainty with respect to global trade. There's probably still scope for tariffs and negotiations to still play out in 2026. However, I think the major shock probably did occur back in April and May. And gradually it's been a softening of that.

The topic of I will absolutely be front and centre in 2026. Clearly, this technology is with us to stay, and it will continue to evolve, and potentially, we will see a greater degree of adoption and really what it's capable of doing as we move forward, not just in 2026, but beyond. We did note towards the end of 2025 that there was some, some concerns brewing about some of the more frothy areas of that market, whether it be valuation or the scale of capital expenditures that are going down and when returns might be generated.

But generally, it's very exciting as a technology. So, I think that will be another major topic, if not the major topic for investors to consider in 2026. We are going forward as we always do, which is to have a portfolio that possesses resilience. Companies that are capable of delivering sustainable earnings growth, but also should the global economy perhaps go through a rougher patch then is expected, the companies are still able to deliver that earnings growth, that free cash flow, without us having to make excessive amounts of change into the portfolio. I think when we look at global markets, largely driven by the performance of the US, the last couple of years, we've seen a very strong with the level of return, but it has been somewhat dominated by a small group of companies, largely dancing to the tune of sort of AI.

If we look at international, it's been slightly different. AI is not quite as big a story yet, although that may change. But I think we've seen very, very strong performance from European banks, as well as some industrial companies in the area of defense and aerospace. So, when we look at both of those sort of backdrops, I think we feel that the market will and should broaden out its focus.

Quality stocks as a sort of style factor, have lacked quite badly over the last few years, which is unusual. As such, many of those companies are trading on valuations that historically have been quite rare. Not only would be like to see a broadening out, healthcare being a very obvious one, I do think that that is likely to happen at some point, and I think as such, we construct the strategies to have the appropriate level of diversification so that we're capturing the broad propensity of equities to rise, but also the right level of concentration in areas of the universe where we think that the most attractive growth opportunities exist.

I think we go forward feeling very positive about the portfolio, but at the same time seeking to build that resilience into strategies just in case we are in for some choppy waters, shall we say. As ever, we reserve the right to make adjustments to the portfolio, but that is the broad objective, and we very much look forward to updating you as we move forward.

[The information contained in this material are the views of Walter Scott & Partners Ltd. and compiled by CIBC Asset Management Inc., as of December 11, 2025, and are subject to change at any time. CIBC Asset Management Inc. does not undertake any obligation or responsibility to update such opinions. This material is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice, it should not be relied upon in that regard or be considered predictive of any future market performance, nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this material should consult with their advisor.

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