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Schroders Equity Lens April 2026: your go-to guide to global equity markets
Strong earnings forecast despite stagflation risks.
Zobacz cały raportSchroders Equity Lens April 2026
70 strony
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The April 2026 edition of the Schroders Equity Lens is now available: Schroders Equity Lens
Summary:
- The consensus expects 10-20% EPS growth in developed markets this year, and nearly 40% in EM. 10-20% is forecast globally next year too (slide 6)
- 2026 is backed by soaring expectations for IT companies, alongside energy and materials (slide 7)
- Continued rapid growth is forecast for IT companies in 2027, unlike energy. Strong forecasts for consumer discretionary are consistent with a normalisation/no-stagflation outcome. There are clearly risks to this. (slide 8)
- Although not baked into consensus expectations, rising energy prices (and upside risks in other areas such as food) increase the risk of stagflation i.e. high inflation/low growth
- Over the past 100 years, stagflation has been a challenging environment for equities but at such times they’ve still roughly matched inflation on average, and usually beaten cash (slide 9)
- Utilities, energy, consumer staples, real estate, and healthcare have tended to outperform in stagflation years, although real estate has also had the widest variation in outcomes. Qualitative judgement required in addition to quantitative analysis (slides 10-13)
- Utilities, energy, consumer staples, healthcare have also performed best in the 12-months after an oil supply shock (slide 11)
- the UK is significantly overweight the more defensive sectors which have performed well during past oil price spikes and stagflation-years. Japan/EM have challenging exposures, US/Europe also exposed (slide 11)
- Heightened geopolitical risk does not automatically translate into market losses (slide 16)
- Value equities have a low correlation with AI-stocks and have delivered much better outcomes in down-markets for AI-stocks. Most passive approaches to value investing risk leading to disappointment on this front (slide 17-18).
A reminder of long-term stock market experience (slides 19-24):
- 10%+ falls happen in more years than not, 20% falls once every four years
- on average each year, at some point the market falls by 15% and rises by 23%
- when volatility rises it will feel scary but jumping ship at these times would have been damaging to your wealth
- although the ride is bumpy, equities have been less risky than cash when it comes to delivering long-term inflation-beating returns
- there is always a reason to worry but, in the long-run, stocks have beaten bonds which have beaten cash
Chart of the month:
Zobacz cały raportSchroders Equity Lens April 2026
70 strony
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