3Q26 CIO Insights (29 Jun 2026)

Nuggets

3Q26 CIO Insights (29 Jun 2026) | DBS · Nuggets

AI Dominance & Equity Valuations [00:00:04 - 00:01:03]
- The Core Argument: Global equity markets are marching higher, defying macro headwinds because underlying corporate earnings are growing rapidly enough to justify elevated market multiples.
- Mechanics & Nuance: A 26% surge in earnings growth resulted in a 13% decline in the market's P/E ratio from its peaks down to 22x. While this 22x multiple is above the long-term historical average of 18x, the price-to-earnings growth (PEG) ratio remains fundamentally justified when factoring in high secular growth expectations.
- Anecdotes & Evidence: Extreme market concentration is present, with the top 10 AI stocks single-handedly generating approximately 78% of total index gains [00:00:58].
The Energy Security & Power Infrastructure Play [00:01:03 - 00:01:41]
- The Core Argument: The massive digital expansion requires physical power, creating a parallel, value-oriented investment theme in traditional and renewable energy.
- Mechanics & Nuance: Hyperscale data center growth requires a projected AI-related capex of $1 trillion annually over the next few years. This scale of capital spending creates an insatiable demand for electricity, structural grid reinforcement, and diversified power generation.
- Anecdotes & Evidence: The energy sector currently trades at highly attractive multiples in the "low teens" [00:01:10]. Profitable investment opportunities span across renewables, traditional hydrocarbons, storage, grid networks, and nuclear power [00:01:33].
Fixed Income Fixed on Income [00:01:41 - 00:02:02]
- The Core Argument: High inflation and heavy sovereign debt supply make long-term government bonds a risky proposition, shifting preference toward medium-duration credit.
- Mechanics & Nuance: To insulate portfolios from price downside while maximizing yields, the CIO recommends avoiding ultra-long duration altogether.
- Anecdotes & Evidence: The optimal fixed-income strategy focuses heavily on investment-grade credit with an average portfolio duration restricted to 5 to 7 years [00:01:56].
Portfolio Resilience & The Barbell Strategy [00:02:02 - 00:03:09]
- The Core Argument: Volatile macro environments require non-correlated assets and a structured asset allocation model to deliver steady long-term gains.
- Mechanics & Nuance: Gold has experienced short-term volatility and behaved like a risk asset due to crowded speculative capital positioning. However, structural de-dollarization and monetary debasement act as persistent secular tailwinds. Private assets and hedge funds are utilized to deliver market-independent alpha.
- Anecdotes & Evidence: The DBS Barbell Strategy has successfully delivered close to 9% annualized returns since its inception in September 2019, surviving the COVID-19 pandemic and the Federal Reserve's aggressive 500 basis point rate-hiking cycle in 2022 [00:02:47].

3Q26 CIO Insights (29 Jun 2026) | DBS

1. Executive Briefing (TL;DR)

References

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3Q26 CIO Insights (29 Jun 2026) | DBS

1. Executive Briefing (TL;DR)

References

More nuggets

Robert Kaplan Exclusive | India's Growing Economic Potential Amid Global Challenges

BofA: The Consumer’s Summer Spending Surge | 15 Jul 2026

Must Read Research: SpaceX; The Next AI Winners; Europe’s Earnings Momentum; Buy Value | 14 Jul 2026

2. Speaker Profiles & Context

3. Thematic Deep Dives

AI Dominance & Equity Valuations [00:00:04 - 00:01:03]

The Energy Security & Power Infrastructure Play [00:01:03 - 00:01:41]

Fixed Income Fixed on Income [00:01:41 - 00:02:02]

Portfolio Resilience & The Barbell Strategy [00:02:02 - 00:03:09]

4. Forward Looking Indicators & Risks

5. Data & Macro Matrix

Capital Group: 2026 Midyear Outlook | 16 July 2026