Adapting to Uncertainty in an Era of Energy Shocks and AI Disruption

Legal & General Investment Management /

24-06-2026

L&G's Q2 2026 Asset Allocation Outlook argues that investors are confronting a growing list of risks, but that disciplined portfolio construction requires focusing on fundamentals rather than reacting to every new source of anxiety.

The firm believes the conflict in the Middle East has challenged what previously looked like a benign outlook for growth and inflation, with higher energy prices threatening both consumer spending and central-bank policy assumptions.
L&G remains constructive on equities despite recent volatility, arguing that geopolitical sell-offs often create opportunities, while maintaining a cautious stance toward credit markets where downside risks appear greater than upside potential.
The report also highlights a broader market shift toward "heavy asset, low obsolescence" industries such as commodities and infrastructure, while warning that not all physical-asset businesses possess durable competitive advantages.

Read the full outlook for L&G’s views on inflation, energy markets, AI investment, portfolio construction and global asset allocation.

Energy