In Paris last week, experts at Natixis Investment Managers Thought Leadership Summit, attended by this news service, discussed the outlook for global equities, against a backdrop of rising geopolitical tensions in the Middle East and surging oil prices.

Along with a number of investment managers diversifying out of US equities, Daniel Nicholas, client portfolio manager at Chicago-headquartered Harris Oakmark, a subsidiary of Natixis Investment Managers, said they are significantly underweight in US equities and in favour of Europe.

“Last year, the US was the only game in town, with US exceptionalism prevailing. Every economist was overweight in the US. Then came so-called Liberation Day and that all changed and the war in Iran as well,” Nicholas said at the Summit, which was also attended by WealthBriefing.

Liberation Day â€“ on 2 April 2025 – was when US President Donald Trump announced sweeping tariffs on imports to the US. New tariffs were also announced this year after the US Supreme Court ruled that the Trump administration's use of the International Emergency Economic Powers Act (IEEPA) to impose broad-based tariffs exceeded its statutory authority. Trump reimposed tariffs of 10 per cent under Section 122 of the 1974 Act, with plans to raise them to 15 per cent.

“Expectations changed. Wall Street was looking for 7 per cent earnings growth this time last year in Europe for the next 12 months and this year it’s 11 per cent,” Nicholas continued. “Expectations have improved in Europe. High quality European businesses can be found cheaply today and we are able to buy those. We are significantly underweight in US equities, in favour of Europe. In the US, because of the concentration of US stocks, it’s also a wonderful time to diversify US exposure. We are finding a lot of value in the US even though the US is making new valuation highs.”

Switzerland-based Pictet Wealth Management also favours reducing investors allocation to US equities, and increasing exposure in European and emerging market equities in 2026.

Nicholas sees more opportunity in value than growth stocks. “It’s our time to shine,” he said. Harris Oakmark is known for its approach to long-term value investing and US large caps, often accessed via a mutual fund or exchange-traded fund (ETF).

Karen Kharmandarian, CIO, thematic equities at Paris-based Mirova, a subsidiary of Natixis Investment Managers, echoed the predominant sentiment, noting that last year was the year of US exceptionalism. “But the Magnificent 7 – Amazon, Tesla, Meta, Microsoft, Alphabet, Nvidia, and Apple – have underperformed this year while there has been significant performance in South Korea, Japan and Europe. Less so from the US,” he said. Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers, also sees investment opportunities in South Korea, Taiwan and Latin America. Samy Chaar, chief economist, CIO Switzerland at Swiss private bank Lombard Odier, will remain invested in Asia, which makes up 70 per cent of emerging markets, despite the conflict.

“The European market is also coming back in favour as US investors diversify from the US market that had been doing well,” Kharmandarian continued. He still sees some opportunities in US tech. Chetouane has also increased his exposure to the US recently, amidst the Middle East conflict and surging oil prices.

Kharmandarian thinks it’s important to be pragmatic and agile as the market is more difficult to predict. On sectors, he sees opportunities in AI, tech and healthcare. See more here.

Fabio Di Giansante, European equity portfolio manager at DNCA Finance, a subsidiary of Paris-based Natixis Investment Managers, noted that European equities have been performing well for three years. “We have seen some flows out of US assets as investors seek to diversify,” he said. However, he still sees earnings growth in favour of the US going into double digits this year compared with mid-single digits in Europe. On sectors, he believes that selectivity is the name of the game. He sees opportunities in AI and healthcare. “We need to be agile in this critical situation. We are in wait and see mode. Keep calm and carry on is the right strategy for now,” Di Giansante said.

Willem Sels, global chief investment officer at HSBC Private Bank said that recently investors have been actively seeking to diversify away from the US but highlighted that the US market proved its resilience when the Iran conflict started, thanks to its energy sector and the dominant tech sector, which is largely insensitive to oil prices.