{"id":526651,"date":"2026-07-05T17:17:13","date_gmt":"2026-07-05T17:17:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/526651\/"},"modified":"2026-07-05T17:17:13","modified_gmt":"2026-07-05T17:17:13","slug":"lombard-odier-underlines-10-investment-convictions-for-h2-2026","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/526651\/","title":{"rendered":"Lombard Odier Underlines 10 Investment Convictions For H2 2026"},"content":{"rendered":"

\"Lombard<\/p>\n

Swiss private bank Lombard Odier outlines its 10 investment convictions for the second half of 2026. Its outlook is broadly constructive, favouring emerging market equities, while noting that volatility is likely to continue.\t \t <\/p>\n


\n Despite a difficult geopolitical backdrop and economic
\n environment, macroeconomic and market conditions support risk
\n assets. This is the view of Dr Nannette Hechler-Fayd\u2019herbe, head
\n of investment strategy, sustainability and research, CIO EMEA,
\n and Dr Luca Bindelli, head of investment strategy at Lombard Odier<\/a>. \n<\/p>\n


\n Similar to\u00a0a
\n number of wealth managers<\/a>, they keep an overweight stance in
\n global equities, driven by emerging markets, where valuations are
\n more attractive and the outlook for earnings is stronger than in
\n developed markets. In developed markets, they see opportunities
\n in US small capitalisations. \n<\/p>\n


\n They have adopted a more neutral outlook for technology. \u201cThe
\n sector remains supported by strong fundamentals, including robust
\n earnings growth and sustained artificial intelligence demand.
\n However, we expect market performance to broaden, and now favour
\n financials in the second half of the year,\u201d Hechler-Fayd\u2019herbe
\n and Bindelli said. \n<\/p>\n


\n They have raised exposure to global government bonds to neutral
\n in fixed income, locking-in high yields as inflationary pressures
\n ease. Within developed sovereign bonds, they see the most
\n compelling opportunities in UK gilts, as well as Australian
\n bonds. \n<\/p>\n


\n \u201cThe US dollar should be supported by a stable US Federal Reserve
\n outlook and a resilient US economy, and we have moved to a
\n neutral stance versus lower-yielding developed currencies such as
\n the euro and the Swiss franc,\u201d Hechler-Fayd\u2019herbe and Bindelli
\n continued. They stay positive on higher-yielding currencies,
\n including those in emerging markets. They prefer expressing these
\n preferences against the Swiss franc or the euro. \n<\/p>\n


\n Hechler-Fayd\u2019herbe and Bindelli said that\u00a0markets were
\n entering the second half of the year having “digested” the Middle
\n East conflict, and energy shock and inflation concerns. They
\n believe that the
\n interim agreement<\/a>\u00a0between the US and Iran struck in June
\n has reduced market uncertainty as they move into the second half
\n of 2026, although talks are continuing in order to secure a
\n permanent deal. \n<\/p>\n


\n They remain positive on risk assets, but volatility will persist.
\n \u201cFurther inflationary pressures, a more restrictive Fed,
\n geopolitical tensions, the US midterm elections and policy shocks
\n such as tariffs, all demand vigilance,\u201d Hechler-Fayd\u2019herbe and
\n Bindelli said. \n<\/p>\n


\n Below, Lombard Odier outlines in detail its 10 convictions for
\n the second half of 2026: \n<\/p>\n


\n 1. Emerging markets

\n The Middle East conflict has taken a temporary toll on emerging
\n market assets (bonds and some stocks) but has not altered their
\n appeal. Lower valuations compared with\u00a0developed market
\n equities now offer a good entry point for\u00a0benefiting from
\n superior earnings growth. Normalising oil flows from the Middle
\n East and lower crude prices should help emerging market
\n importers, especially in Asia. Lombard Odier\u2019s preferred equity
\n markets remain South Korea, South Africa and China. Emerging
\n market tech firms combine more attractive valuations with
\n stronger earnings growth than their developed-market
\n counterparts. Emerging market bonds offer the strongest yield
\n opportunities relative to credit quality in fixed income, while
\n public debt ratios and external balances remain healthier than in
\n developed markets. Emerging market currencies should also regain
\n ground against the US dollar, which is expected to weaken now
\n that geopolitical uncertainty in the Middle East has peaked. \n<\/p>\n


\n 2. Financials and selected cyclicals

\n With geopolitical risks receding, earnings prospects should
\n broaden beyond the tech sector to a wider range of cyclical
\n industries, many of which have borne the brunt of the energy
\n shock. Lombard Odier favours financials for their solid earnings,
\n attractive valuations, and strong capital returns. In other
\n sectors, it likes sub-segments such as luxury, with strong
\n pricing power and margins, along with demand stabilising as China
\n and tourism recover. Key risks are a weak rebound in China,
\n currency headwinds, and softening demand from aspirational
\n consumers. \n<\/p>\n


\n 3. China opportunities remain, now onshore as
\n well

\n Chinese equity markets have trailed other emerging markets
\n recently. However, Lombard Odier believes that post peak
\n geopolitical uncertainty, a broader approach is warranted. It
\n therefore favours onshore equities alongside offshore markets. \n<\/p>\n


\n 4. Quality developed market equities with attractive
\n dividends

\n Reinvesting dividends is one of the most reliable strategies for
\n wealth preservation and growth in equity portfolios. Quality,
\n dividend-paying companies in developed markets can offer
\n attractive cash flows and lower stock price volatility than the
\n broader market, as well as strong balance sheets. These companies
\n span industries such as financials, energy, industrials,
\n healthcare, consumer staples, utilities, and real estate. \n<\/p>\n


\n 5. Small caps recovery

\n Developed market small-capitalisation equities recovered in the
\n second half of 2025 thanks to easing monetary policy, improving
\n earnings revisions, and capital expenditure. Lombard Odier sees
\n more upside potential due to attractive valuations, earnings
\n growth and exposure to a potential manufacturing recovery.
\n Small-caps have started the year well, but have paused since the
\n start of the Middle East conflict due to their underexposure to
\n the US tech sector. The private bank expects outperformance to
\n resume with\u00a0cyclical sectors growing driven by accelerating
\n and superior earnings growth at attractive valuations relative to
\n mid and large caps. \n<\/p>\n


\n 6. High-yielding sovereign bonds

\n With corporate spreads \u2013 the yields corporates offer above
\n sovereign bonds \u2013 at historically tight levels, select,
\n high-yielding government bonds offer attractive risk-adjusted
\n returns. Ten-year UK gilts, Lombard Odier\u2019s preferred exposure,
\n have experienced some politically-driven volatility, but the firm
\n expects the Bank of England to cut policy rates in 2027 after
\n keeping them on hold this year, leading to a fall in long-term
\n yields, and attractive total return prospects for gilts. It also
\n likes Australian government bonds. \n<\/p>\n


\n 7. Convertible bonds

\n Global convertible bonds have significant exposure to the
\n Asia-Pacific region and sectors such as\u00a0utilities, real
\n estate, and materials. Today\u2019s rising volatility boosts the value
\n of equity call options, despite some rises in bond yields.
\n Convertible bond issuer default rates fell in 2025, supported by
\n lower interest rates. Lombard Odier continues to monitor any
\n risks stemming from AI ripple effects for issuers of
\n convertibles. \n<\/p>\n


\n 8. Swiss real estate

\n In Switzerland, real estate investments still offer an attractive
\n alternative source of yield for Swiss franc-based investors.
\n Lombard Odier\u2019s outlook for the Swiss National Bank remains for
\n unchanged interest rates this year. \n<\/p>\n


\n 9. Hedge funds and private equity

\n To enhance diversification, investors should maintain exposure to
\n hedge funds and private equity. Hedge fund strategies that focus
\n on corporate activities, such as event-driven strategies, and
\n equity market price dislocations, such as relative
\n value\/arbitrage strategies, can deliver returns irrespective of
\n the direction of the broader equity market. Private equity can
\n complement these exposures. \n<\/p>\n


\n 10.FX with clear domestic catalysts, funding by low
\n yielders

\n Lombard Odier favours undervalued currencies with positive
\n catalysts. However, with the prospect of the US dollar being
\n better supported against lower-yielding currencies, the bank
\n favours expressing this view against both the Swiss franc and the
\n euro. In developed markets, it favours the Australian dollar,
\n which benefits from supportive terms of trade and attractive
\n interest rate differentials. It believes the Chinese renminbi
\n will continue to strengthen moderately, backed by a large trade
\n surplus and a rising official preference for continued currency
\n appreciation. Elsewhere in emerging markets, it likes the South
\n African rand and the Brazilian real. <\/p>\n","protected":false},"excerpt":{"rendered":"Swiss private bank Lombard Odier outlines its 10 investment convictions for the second half of 2026. Its outlook…\n","protected":false},"author":2,"featured_media":526652,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46],"class_list":["post-526651","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/526651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=526651"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/526651\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/526652"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=526651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=526651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=526651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}