Walter Scott & Partners Ltd. | 2026 mid-year 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.

Looking at 2026 so far, looking at the global equity landscape, there have been a number of developments in equity markets that perhaps were not factored in as they came into the year. Most notably, the conflict in Iran, which has led to an uptick in the performance of the energy sector, which until recently had been pretty lacklustre.

Following a six-month pause in excitement over AI, we've seen the sort of bottom was bottom of markets, noticed a very strong rebound across a lot of central conductor names, as well as further broadening within that group to sort of memory makers, as well. Over the last month or so, the strength of the semiconductor space has been notable.

I would say, firstly, that we came into the year with a strong portfolio of businesses, certainly broad coverage across industries where we think that either they're performing very well, currently, or we think that there is a strong prospect for attractive earnings growth going forward and very much want to keep that diversification within the portfolio, particularly given the concentrated nature of markets.

At the same time, we have been making some changes. The exit of a couple of healthcare positions—Nova Nordisk, life sciences business CSL. We added three energy companies fairly early on in the conflict, largely on the basis that these are standalone, very good businesses, but also a belief that the conflict would, perhaps, carry on longer than the initial market view was. And if that is the case, then energy prices will be elevated and therefore conducive to strong earnings growth from those businesses going forward.

We also added a position in water infrastructure company Silo, where we believe there are really strong tailwinds. That business carries very high margins and holds a strong competitive position, that we feel compliments the portfolio and brings something new to it.

And obviously, one of the areas of the AI semiconductor landscape that we didn't have exposure to, we did that basically on a continued pullback in valuation, that we thought represented an interesting entry point. But also, and more importantly, the very obvious shift that we're now seeing from training these large AI language models to what is called inference, which is much more about corporates adopting AI and putting it to use in real world applications. We think that that next phase has got a long way to run. Nvidia and a number of other companies have a play in that.

It’s still fairly early in the year, although we are rapidly approaching midpoint. A lot has happened in markets. A fair amount in the strategy as well. And I think we will just continue to look towards contain strong earnings from these businesses, and over time, whilst markets are very concentrated, a broadening out of the drivers of of global actives, which should benefit the strategy as we move forward.

The information contained in this material are the views of Walter Scott & Partners Ltd. and compiled by CIBC Global Asset Management, as of July 14, 2026 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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