LGT Private Banking House View

November 2026 - in a nutshell

A constructive investment view can coexist with a clear recognition of risks. Economic resilience and strong corporate earnings still support taking risk, even as renewed inflation, higher financing costs and geopolitical uncertainty make the environment more demanding. The portfolio response need not be a choice between participating in growth and seeking protection. This month, we retain our equity conviction while strengthening the defensive side of our allocation.

  • Date
  • Auteur Patrick Huber, Investment Solutions Europe, LGT Private Banking
  • Temps de lecture 7 minutes

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We therefore maintain our moderate risk-on stance, with equities “Overweight” and fixed income “Underweight”. The US remains our preferred equity market, supported by solid domestic activity and stronger earnings momentum. Europe faces a less favourable combination of growth and inflation, as high energy costs and political uncertainty weigh on the outlook. These differences continue to justify a selective regional approach rather than a broad retreat from equities.

The principal allocation change is in gold, which we raise from “Neutral” to “Overweight”, alongside a reduction in liquidity to “Underweight”. Gold has not been immune to recent market pressures: higher US real yields and a stronger dollar have weighed on its price. The recent weakness does not, however, remove its role as protection against inflation uncertainty, geopolitical risk and doubts about the purchasing power of currencies. We expect the headwind from real yields to prove limited or temporary and regard the correction as an opportunity to strengthen that protection.

Within equity we must remain disciplined. Following the relative outperformance of US stocks, we are trimming our US position to stay within our tactical target allocation but remain positive on US equities. Our sector preferences also combine participation and resilience: industrials and materials benefit from capital spending and infrastructure demand, while health care offers support through innovation and non-discretionary demand.

For investors, these adjustments show how we can retain our investment conviction while responding to a more demanding environment. Adding gold is not a forecast that equities must fall, nor does it promise protection against every setback. It complements a portfolio that remains positioned for resilient growth, while recognising that inflation and geopolitical risks deserve an explicit place in its construction.

Macroeconomic environment

US growth remains resilient, supported by domestic demand and AI investment, though both consumer spending and AI capital expenditure may slow. The euro area faces a more fragile outlook as energy costs, tighter financing and political uncertainty weigh on confidence. Inflation has risen to 3.7% in the US and 3.8% in the euro area. We expect one more Federal Reserve (Fed) and European Central Bank (ECB) rate hike in December, then a pause until mid-2027. Broader inflation could require further tightening and we expect the Swiss National Bank (SNB) to raise rates twice in the second-half year of 2027 to 0.5%

Investment strategy

We reaffirm our moderate risk-on stance, maintaining an “Overweight” in equities and an “Underweight” in fixed income relative to strategic weights. We raise alternative investments from “Neutral” to “Overweight” by moving gold to “Overweight”, while reducing liquidity from “Neutral” to “Underweight”.

Equity strategy

Equity markets have moved broadly sideways since August. Higher interest rates, high energy prices and continued geopolitical uncertainty have weighed on equity markets. Questions about how to finance the immense investment in AI infrastructure – and whether it will deliver adequate returns – have added to these pressures. On the other hand, corporate earnings remain solid and forecasts continue to be revised upwards, providing support to markets. In our view, earnings remain strong, although earnings growth is likely to moderate from a very high level. Given the improving economic outlook and stronger earnings momentum in the US, we maintain our “Attractive” view on the US market. We remain “Unattractive” on the eurozone due to political uncertainty – particularly given the difficult situation in France – and high energy costs, which pose a risk to earnings momentum.  At the sector level, our positive view on healthcare has paid off, and we maintain our “Attractive” stance. The cyclical industrials and materials sectors also remain “Attractive”, while we continue to take an “Unattractive” view on the consumer sectors.

Fixed-income strategy

We have raised our yield forecasts but still expect yields to decline across the curve. Our preferred expression is a modest front-end duration bias or 2s10s bull steepener: as a shift from tightening to rate cuts becomes more credible, two-year yields should fall faster than ten-year yields. Inflation uncertainty, bond supply and fiscal risks may limit the decline at the long end. French sovereign risk has increased, while CHF duration offers less near-term opportunity than USD duration. In credit, we favour EUR over USD investment grade, supported by solid corporate fundamentals and attractive yields.

Currency strategy 

The dollar benefited from strong momentum of US real yields and the prospect of a Fed rate hike in December, against a backdrop of persistent core inflation. Peer currencies remain under pressure as well: the euro from fiscal risk in France, and the yen from structurally unattractive real yields – with the Swiss franc and the Norwegian krone the only currencies to hold their ground of late. Generally, commodity currencies and the US dollar gained since the start of this year, as the reflaring of energy prices and its impact on commodities provided a healthy background for those currencies, since the industrial and investment cycle kept up remarkably well over 2026.

Precious metals strategy

Gold suffered considerably from the real-yield headwind; nonetheless, we are reiterating our “buy-the-dip” call and expect a bottoming process and the beginning of a new upswing once real yields cool. While it is obviously extremely difficult to call the bottom as gold is in a sharp correction after a massive blow-out top in early 2026, we consider gold prices near levels where markets are likely to start forming a bottom – aided by a clear topping out and reversing of real yields. Silver should also be able to stabilise alongside gold, however, we consider it more vulnerable to sharper dips in any bottom formation process due to its nature as a “high beta bet” on precious metals among speculators, meaning there are likely still more weak silver-holding hands that have yet to be shaken out.

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