The fourth quarter kicks off with asset allocation reports from three finalists of the Asset Allocation Awards. These asset managers share the same interpretation regarding the first US interest rate hike in over three years: markets are pricing in more hikes than the managers anticipate will actually occur. Amundi, however, is the only one acting on this view. Meanwhile, Pictet Asset Management is implementing the week’s only rating changes, once again going against the consensus.
House view: Pictet Asset Management
Pictet Asset Management, a finalist for this year’s Sectors Award, is downgrading its recommendation for the industrial sector from ‘overweight’ to ‘neutral’ to avoid excessive exposure to “the most energy-intensive and interest-rate-sensitive parts of the economy.” The consensus recommends ‘overweight’ for the industrial sector (ranking 6th out of 25 sub-asset classes). The utilities sector was downgraded last month. The consumer discretionary sector, rated ‘underweight’ by the consensus, is now moving to ‘neutral’. For the second month in a row, the sector specialist is diverging from the consensus position.
Barometer: Equities remain on track despite high valuations, October 2026↗
House view: Amundi
Amundi, a finalist for the Fixed Income Award, views the Fed’s interest rate hike as an insurance measure and a matter of credibility, rather than the start of a new tightening cycle. According to Amundi, the market is pricing in “too many interest rate hikes by central banks.” Tactically, the asset manager is therefore slightly increasing duration in the United States and the eurozone; the official recommendation remains slightly positive. Amundi is the only one of the three to back its words with action, translating its analysis into changes to actual recommendations.
Global investment outlook, October 2026 ↗
House view: Northern Trust Asset Management
Northern Trust Asset Management, a finalist for the Asset Allocation Award, shares this view: the Fed is “adjusting the dials, not turning the screws.” Only a tightening of more than 125 basis points within a year would signal a genuine shift in policy. Nevertheless, duration remains neutral, as US Treasury yields are close to the firm’s own fair value estimates. For Northern Trust, therefore, an aggressive Fed move is not yet a reason to buy.
Investment Perspectives, Interest rate recalibration, not policy tightening – October 2026 ↗
Implications for the consensus
Pictet and Northern Trust AM maintain a neutral position on government bonds, exactly in line with the consensus (ranked 20th out of 25, with 22% overweight). Only Amundi is slightly ahead of the curve. At the sector level, Pictet diverges: the consensus still holds an overweight position in the industrial sector. There is no early signal this week; for the time being, no one else is following suit.