Global wealth creation has surged at an extraordinary pace over the last five years. According to the new Wealth Sizing Model included in The Wealth Report 2026 by Knight Frank, the global population of Ultra-High-Net-Worth Individuals (UHNWIs)—defined as those with net assets exceeding $30 million—has expanded from 551,435 in 2021 to reach 713,626 worldwide.
As detailed in the document, this rapid expansion has been decisively dominated by the United States, which generated 41% of new ultra-high-net-worth individuals thanks to the depth and liquidity of its capital markets, as well as the powerful multiplier effect of the technology sector and artificial intelligence (AI). Meanwhile, Asia-Pacific and India are consolidating their positions as secondary drivers of structural growth.
Figures from the report reveal that, over the past five years, 89 people around the world crossed the $30 million threshold every single day. The strength of U.S. financial infrastructure will drive the country from concentrating 35% of global UHNWIs in 2026 to a projected 41% by the year 2031, adding more than 136,000 new ultra-high-net-worth individuals. To accommodate this relentless U.S. expansion, nearly every other country—including China, which will drop from its current 17% share to 15%—will see its global market share contract.
However, the report highlights clear geographical dispersion looking ahead, driven by rapidly maturing economies. Indonesia leads percentage growth forecasts, with a projected 82% surge in its UHNWI population by 2031. It is followed closely by Saudi Arabia and Poland (both above 60%), as well as Vietnam (nearly 60%), underscoring the speed at which new wealth hubs are forming, particularly in Southeast Asia and the Middle East.
Global UHNWI and Billionaire Charts. Source: Knight Frank, The Wealth Report 2026
The billionaire segment confirms this shift toward global diversification. Although Asia-Pacific holds the highest total count (1,116 compared to North America’s 965), the fastest growth rates over the next five years will be registered in Saudi Arabia (+183%), Poland (+123%), Sweden (+81%), and Australia (+77%).
The Australian case stands out for its economic resilience and depth: its UHNWI population is projected to grow nearly 60% (reaching 26,095 individuals), supported by an ecosystem combining commodities with an increasingly sophisticated financial services and technology sector.
For its part, India represents a story of large-scale consolidation. After seeing its ultra-wealthy population skyrocket 63% between 2021 and 2026, the country is set to add an additional 27% by 2031, surpassing 25,000 UHNWIs. This progress reflects the transformation of its economy toward a model backed by a deeper equity market, greater private equity penetration, and increasingly established global investment networks.
When Moderna and MSD announced that their personalized mRNA melanoma vaccine had met its primary endpoints in Phase 3, the market did not wait for the fine print. Within hours, both companies added tens of billions of dollars in market capitalization, without a peer-reviewed scientific publication or a complete breakdown of efficacy and safety yet available. Funds Society consulted three fund managers with exposure to the healthcare sector—Candriam, BNP Paribas AM, and Groupama AM—to understand exactly what that price is discounting, and what needs to happen for the bet to hold.
“Investors are assigning value to the possibility that this approach could work across multiple tumor types and treatment settings,” summarizes Sara Torrecilla, Senior Biotech Analyst at Candriam, regarding a stock rally that at its peak added roughly $90 billion in combined market value and settled around $60 billion net. It is, in her words, a warning sign as much as a point of enthusiasm: the peak sales estimates already circulating in the market, in the tens of billions of dollars, “should be viewed as market assumptions, not clinical evidence.”
Groupama AM, manager of the Global Disruption fund, reaches a similar diagnosis from a different angle. “The surge in stock prices for Moderna and Merck reflects a de-risking re-rating of both companies thanks to a historic validation of the mRNA platform, considered ‘first-in-class,'” explains Julia Kung, portfolio manager and international equity and convertible bond analyst at the firm. The market, she adds, “is also betting that this could be expanded beyond melanoma to other tumors, such as non-small cell lung cancer, bladder, kidney, and other cancer types,” even though all that has been published so far is “an interim summary of results across two endpoints” without the complete dataset on risk, statistical confidence, and safety. Stock prices, she reminds, “always look forward,” and reacted this way because this represents the first Phase III success for an individualized neoantigen therapy and for any mRNA-based cancer treatment.
From BNP Paribas AM, Senior Portfolio Manager Christian Fay agrees that the reaction is justified, though he emphasizes the underlying medical need: the interim data showed “statistically significant and clinically meaningful” improvements compared to treatment with Keytruda alone, in a type of melanoma—resected high-risk cutaneous—where unmet medical need remains high. “These results reinforce our conviction that targeted, personalized medicine can be a particularly effective strategy to treat specific types of cancer, such as melanoma,” notes Fay.
Merck, Keytruda, and the Defensive Play
There is a second layer to the story that relates specifically to Merck. Kung, from Groupama, observes that by combining the vaccine with Keytruda, “this collaboration generates a narrative of potential market dominance not only in melanoma, but also across other cancer types where Keytruda is used.” She goes further: “the rally in Merck’s stock price can be interpreted as a successful defensive narrative: that Merck can protect and extend the Keytruda franchise through combination therapies, while also signaling confidence in Merck’s ability to grow beyond Keytruda.” In other words, part of what the market is celebrating is not just the vaccine itself, but the possibility that Merck has found a way to extend the commercial lifespan of its flagship product.
Revolution or Intermediate Step?
It is in the scale of the promise where perspectives begin to diverge. Kung admits that, over the long term, this “could prove to be ‘revolutionary’ and, so to speak, mark the true beginning of the ‘cancer vaccine’ market.” But she qualifies: “at present, it is better characterized as a platform-level inflection point, analogous to the first kinase inhibitor that validated targeted therapy, rather than an immediate restructuring of pharmaceutical leadership.” The reason is two-fold: adjuvant melanoma is “a relatively narrow indication,” and large-scale personalized manufacturing—producing a distinct treatment for every single patient—”remains operationally complex and expensive.”
Candriam frames the same caution within its specific oncology mandate: personalized mRNA vaccines must be “evaluated with the same discipline as other treatment modalities,” in an increasingly multimodal therapeutic landscape where other innovations—such as antibody-drug conjugates and targeted therapies—have already found their place depending on the tumor type. Torrecilla expands the radar beyond pharmaceutical companies: the life sciences supply chain—tumor sequencing, mRNA manufacturing, lipid nanoparticles—added roughly $50 billion in market value on the day of the announcement, according to Jefferies estimates. But she clarifies the limits of that thesis: “no third-party vendor has been publicly confirmed as a direct manufacturing or sequencing partner,” so it is best not to get ahead of assigning that value to specific companies just yet.
BNP Paribas, without a dedicated thematic healthcare fund, resolves the dilemma differently: capturing the thesis through diversified portfolios that collectively exceed $5 billion, with exposure to healthcare and biotech companies that, according to Fay, act as “engines of innovation” for big pharma. The backdrop, he explains, is structural: nearly $200 billion in big pharma sales will be exposed to patent expirations in the coming years, which will keep both innovation and M&A activity high, because internal R&D at major companies is insufficient to fill that gap.
The next real test for all of this comes in October, with the European Society for Medical Oncology (ESMO) Congress, taking place from October 23 to 27 in Madrid. It is one of the most influential events on the global oncology calendar, where the full trial dataset will be shared.
According to Kung, “the gap between top-line data and granular details is where short-term valuation risk is concentrated.” Torrecilla speaks in similar terms: “The market will focus on the magnitude of the benefit,” both to confirm the commercial opportunity in melanoma and to build confidence in extending the approach to other tumors.
Meanwhile, each fund manager maintains their own list of catalysts. Groupama monitors the FDA submission and review of the Biologics License Application (BLA) for adjuvant melanoma, results in non-small cell lung cancer—which they view as “the most closely watched expansion opportunity given its significantly larger potential market”—pricing and reimbursement signals—since “custom production for every patient represents a major commercial constraint” and payers “will establish the revenue ceiling”—and BioNTech’s trial in pancreatic cancer with autogene cevumeran, which “will indicate the extent to which the concept can be generalized across different tumor types.” Candriam adds Phase 1 data in pancreatic cancer and expected renal cell carcinoma results by year-end to that list. BNP Paribas, for its part, closely tracks other industry milestones such as the JP Morgan Healthcare Conference, broadening its view to other areas of healthcare innovation where it identifies similar opportunities.
Photo courtesyTom Stephens, Head of ETFs at Schroders.
Active ETFs are leaving behind their status as a niche allocation to become an increasingly relevant element in portfolio construction. The Schroders Global Investor Insights Study 2026 (GIIS) shows that investors are seeking to combine active management with the operational advantages inherent to ETFs, overcoming the perception of these vehicles as a mere lower-cost alternative to mutual funds.
Active ETFs are leaving behind their status as a niche allocation to become an increasingly relevant element in portfolio construction. The Schroders Global Investor Insights Study 2026 (GIIS) shows that investors are seeking to combine active management with the operational advantages inherent to ETFs, overcoming the perception of these vehicles as a mere lower-cost alternative to mutual funds.
Thus, globally, virtually all respondents (98%) recognize that active ETFs have a role to play in portfolios (compared to only 2% who believe otherwise), shifting the debate: it is no longer about whether to use them, but how to get the most out of them.
This shift is especially relevant in the current market environment. In a setting marked by higher volatility and persistent uncertainty, investors need tools that allow them to act quickly, closely monitor their positions, and adjust them with agility, without giving up the added value of active management.
Cost is no longer everything
Regarding the factors investors place the most importance on when evaluating an active ETF, cost is cited without hesitation. Lower costs compared to mutual funds are the main advantage for 70% of respondents. But interest in these products is no longer limited to cheaper access to active management. For more than half of respondents worldwide (51%), intraday liquidity and the ability to trade at market prices, along with higher liquidity in the secondary market (55%) compared to equivalent mutual funds, are other major arguments in favor of this investment vehicle. This is because active ETFs can be bought and sold continuously, often supported by market makers. In contrast, traditional funds are typically valued and settled only once a day, limiting flexibility when rapid intervention is needed.
Greater portfolio transparency is another element particularly valued by investors (51%). Conversely, barely 11% of respondents identified tax efficiency as a benefit.
Chart 1: Top factors when choosing an active ETF
Source: Schroders Global Investor Insights Study 2026. The survey question was: “When considering an active ETF, which of the following advantages are most important to you?”, and respondents were asked to rank their top three reasons.
How do investors use active ETFs?
The survey points out that investors incorporate active ETFs as flexible components within portfolio construction. They allow them to express their investment convictions, access differentiated exposures, and complement their core positions, while maintaining high operational efficiency.
This is structured mainly on two levels. On one hand, investors consider that active ETFs play a relevant role in diversification (68%). On the other hand, they also point to them as a core component in building their investment portfolios (38%).
Tom Stephens, Head of ETFs at Schroders, noted: “The appeal of active ETFs lies in the simplicity of the vehicle and the ease with which they can be integrated, both strategically and tactically. Strategically, they can serve as core equity or fixed income exposure; tactically, they allow positioning in duration, themes, or sectors. And it’s not just a matter of costs: the ability to trade intraday across different platforms facilitates making rapid adjustments, with greater transparency and operational efficiency than many other instruments. This is especially useful when seeking specific goals, such as diversification or risk management.”
Active ETFs for specialized and harder-to-access markets
The survey also shows that demand for active ETFs is not uniform across all investment areas. Investors especially value active management in areas where markets have less coverage, are less efficient, or present greater structural complexity. This is the case for thematic or sector strategies (49%), small- and mid-cap equities (43%), and emerging market equities (40%).
This highlights that investors are looking for active ETFs to combine ease of trading with active management results that make a real difference, especially when index exposure is less precise or when other vehicles are less operational.
Addressing concerns: returns and con fusion with passive ETFs
Despite the strong momentum of active ETFs, the survey shows that some obstacles to adoption remain, which have more to do with the fund manager than with the structure of the vehicle itself. Thus, nearly half of respondents globally (43%) point to uncertainty regarding the performance of this investment solution compared to active mutual funds, a vehicle that remains dominant and has a long tradition in the market, as the main concern. Meanwhile, the second largest concern expressed by investors (40%) is the unclear differentiation between active and passive ETFs.
These elements suggest that the next phase of growth for active ETFs will largely depend on managers’ ability to demonstrate the robustness of their investment process and explain how strategies are implemented and managed within the ETF fund structure, so that investors can understand them and track them over the long term.
Photo courtesyJenny Johnson, CEO of Franklin Templeton.
Franklin Templeton, through its flagship real estate subsidiary Clarion Partners, has announced a definitive agreement to acquire a majority stake in Stoneshield Capital. According to the firm, the transaction will triple Clarion’s assets under management (AUM) in Europe to $13 billion (€11 billion), increase Clarion’s overall AUM by 12% to $82 billion (€72 billion), and boost Franklin Templeton’s total alternative assets under management above $300 billion (€265 billion).
Stoneshield is a leading European manager specializing in sector-specific real assets, with $9 billion (€8 billion) under management. Its thematic investment strategies focus on sectors facing structural supply constraints, including residential and student housing, digital infrastructure, life sciences and innovation, hospitality, and critical infrastructure.
“The addition of Stoneshield represents an important milestone in Clarion’s development of an integrated real assets platform in Europe. Stoneshield’s focus on high-return investments and special situations perfectly complements our existing offering. This transaction expands our global investor relationships, diversifies our product lineup, and reinforces our long-term commitment to delivering strong performance and innovative investment solutions to our clients,” explained David Gilbert, CEO of Clarion Partners.
Expanded Presence in Europe
The manager noted that through the acquisition of Stoneshield, Clarion strengthens its footprint in Europe, complementing its established expertise in institutional logistics assets and net-lease real estate with Stoneshield’s capabilities in digital, residential, and industrial-logistics storage.
Currently, Stoneshield’s investment lineup features a series of diversified closed-end opportunistic funds, as well as an investment platform specifically tailored to the student housing and living sectors. The firm also holds strategic stakes in several of Europe’s leading and fastest-growing real asset platforms.
“We are very excited about the expansion opportunity in Europe, both by scaling Stoneshield’s opportunistic funds business and by developing new strategies around their investment themes. Stoneshield’s strategic stakes in various companies not only have the potential to deliver attractive risk-adjusted returns, but we believe they will also generate new asset-level investment opportunities for current and future investment products,” added Josh Pristaw, President of Clarion Partners.
Stoneshield will serve as Clarion’s specialized platform for opportunistic investments in Europe and will maintain its offices in Spain, Portugal, Ireland, the United Kingdom, and Luxembourg. As part of the transaction, co-founders Juan Pepa and Felipe Morenés remain committed to leading Stoneshield for the long term, retaining responsibility over investment strategy, growth, and the firm’s day-to-day management. Working in close collaboration with Clarion Partners and Franklin Templeton, they will also play a central role in expanding the firm’s European real assets platform, developing new investment strategies across their areas of expertise, and creating innovative products for institutional and private banking clients globally. Together, they will continue to drive strategic growth opportunities through new investment themes, geographical expansion, and selective acquisitions.
Juan Pepa commented: “We are thrilled to join Clarion Partners’ investment management platform and look forward to further scaling the size and scope of our business in supply-constrained growth sectors. The transaction allows us to benefit from the advantages of a global platform while preserving our team, our strategy, and our culture.”
For his part, Felipe Morenés added: “We firmly believe that our partnership with Clarion Partners and Franklin Templeton will accelerate our growth and reinforce our commitment to generating value for our clients, backed by the long-term positive structural fundamentals of real asset investing across Europe.”
Franklin Templeton’s Strategy
According to Jenny Johnson, CEO of Franklin Templeton, Stoneshield has built an extraordinary track record of superior risk-adjusted returns, and its integration into Clarion’s platform will position the team ideally for continued robust growth.
“We are delighted to welcome Stoneshield to Franklin Templeton. This combination strengthens our real asset capabilities in Europe and creates opportunities to extend the strengths of both Stoneshield and Clarion across different geographies. This acquisition represents another important step in our strategy to globalize our real asset capabilities, expand our private markets business, and enhance our offering for clients worldwide,” stated Johnson.
The transaction is expected to close during the fourth calendar quarter of 2026, subject to customary closing conditions, including required regulatory filings.
The world’s 300 largest pension funds reached a record $27.7 trillion in assets under management at the end of 2025, representing a 13.4% growth compared to the previous year and the largest annual increase recorded since 2017, according to the Global Top 300 Pension Funds report prepared by WTW’s Thinking Ahead Institute in collaboration with Pensions & Investments.
According to the report, the increase was particularly significant among the largest funds. “The 20 largest expanded their assets by 14.7%—above the average—reaching $11.9 trillion and now accounting for 42.8% of the assets managed by the world’s 300 largest funds,” they explain. Growth was uneven across different regions. North America remains the largest region in the Top 300, although it lost market share, holding 44.7% of assets in 2025 compared to 47.2% the previous year. However, over the past five years, it registered the highest annualized growth among the major regions at 6.4%.
In Europe, assets managed by the world’s major funds increased their share to 24.6%, highlighted by Norway’s sovereign wealth fund, which surpassed $2 trillion for the first time and consolidated its position as the world’s largest pension fund—12.7% ahead of the second-largest. The United Kingdom and the Netherlands were the only markets to record negative asset growth over the last five years, both in local currency and U.S. dollars, though they remain the two largest pension markets in Europe, with mature systems and a significant presence of defined benefit plans. Europe also continues to hold the lowest proportion of defined contribution assets at 13.2%, compared to 30.7% in Asia-Pacific and 31.6% in North America.
Notably, Asia-Pacific saw its share of assets rise to 26.6%. The region maintains high exposure to equities at 51.4% of its assets—the highest percentage among the primary regions—compared to 36.4% allocated to fixed income and 10.5% to alternative assets. Technology, and especially artificial intelligence, is becoming increasingly relevant for pension funds. Fifty-six percent of study participants expect AI to generate significant benefits for the sector as a whole over the next five to ten years, though ambition outpaces readiness: many funds are still building the necessary processes and infrastructure to harness its full potential. Eighty-one percent identify data quality and standardization as one of the primary barriers to achieving this.
Greater Scale and New Capabilities
The pursuit of scale remains a primary trend in the sector. Major funds are not only increasing their asset volumes, but are also seeking new ways to expand capabilities through strategic alliances and collaborations. In this context, the report introduces the concept of hyperscaling—borrowed from the tech sector—to describe how organizations can leverage scale, data, capabilities, relationships, and governance systems to improve outcomes.
“Large pension funds are growing while simultaneously seeking new ways to enhance their capabilities. Scale remains key, as does the ability to combine knowledge, technology, data, and good governance to make better investment decisions and respond to an increasingly complex environment. Spain needs to continue promoting the development of solid, efficient complementary social welfare pillars that reinforce the sustainability of future retirement income,” explains Oriol Ramírez-Monsonis, Director of Investments at WTW Spain.
The global trends highlighted by the study also point to significant challenges for pension systems, such as the need to improve investment diversification, adapt management to the evolving needs of savers, and leverage new technological capabilities to enhance decision-making.
Photo courtesyPaul Lacroix, Head of Products de Ossiam (Natixis).
Before discussing investment ideas and products, Paul Lacroix, Head of Products at Ossiam (Natixis), pauses briefly to explain the benefits of quantitative strategies, through which “we avoid human biases.” Throughout our interview, he emphasizes the product innovation offered by the firm and highlights the advantages brought by being part of Natixis’ multi-boutique environment. In the current market climate, their equity portfolios favor the communications services, healthcare, consumer discretionary, and consumer staples sectors, while remaining cautious regarding technology and energy due to the elevated prices of their constituents.
What are the advantages of being a specialist in such a competitive environment?
We founded Ossiam in 2009, after the crisis. The objective was to have an asset manager focused on quantitative strategies. We create models and then follow them rigorously across our strategies. The advantage of a quantitative strategy is that it allows risk management and all liquidity tools to be implemented directly within the strategy itself, avoiding human biases that can sometimes lead to buying or selling stocks based on a portfolio manager’s opinion—which can be either positive or negative. Thanks to the work done prior to launching a product, we know precisely what type of risk we anticipate. Furthermore, we reduce human biases to a certain extent once the product is launched. So, yes, the environment is highly competitive for everyone, as well as very demanding. The majority of our assets are currently in equity products.
And what does working within Natixis’ multi-boutique structure provide you?
It is very useful for us. When we founded the firm, we decided to focus on quantitative investments and ETFs—a sector that we know is not yet as widespread in Spain as in other countries. Due to this setup, we needed a large firm to raise capital and distribute our products across different countries. Natixis helps us with global distribution. Having a specialist is very helpful for us. When we travel to Latin America, we have someone there who knows our products as well as the client, which is important, giving us a specialist worldwide.
Are you present in Latin America?
Yes, we visit sometimes. We regularly visit Peru, Chile, and Colombia, in addition to Mexico, where there are large institutional investors who buy UCITS funds, especially ETFs. It is an important country for us.
And what feedback do you receive from Latin American investors regarding UCITS products?
They appreciate the security and the regulatory framework backing them. They know exactly what to expect from a UCITS product. They are already familiar with the diversification limits, as well as the risk management. The global reputation of UCITS is very strong. For them, investing in UCITS funds represents, in a way, a safety net.
How does your flagship strategy, the Ossiam Shiller Barclays CAPE US Sector Value, operate?
It all starts with Professor Robert J. Shiller, winner of the Nobel Prize in Economics in 2013. In 2012, right before receiving the award, Shiller created an index alongside Barclays called the Shiller Barclays CAPE US Sector Value Index. Its goal was to utilize part of the research Professor Shiller conducted in the 1980s on the CAPE ratio. The CAPE is like a price-to-earnings ratio, but applied over a 10-year period instead of just one year. It allows for evaluating the valuation of a benchmark index, such as the S&P 500, but also functions at a sector level. That is what we use in the strategy. In short, it selects four U.S. sectors every month based on their valuation and momentum that are undervalued relative to their long-term average. The core idea is mean reversion, meaning that a very cheap sector will become more expensive as prices rise, and vice versa. It is a systematic strategy that repeats every month.
And which are currently the cheapest sectors?
In August, the U.S. Shiller portfolio included materials, healthcare, consumer discretionary, and consumer staples. The communications services sector was the cheapest in the U.S. market in August, so theoretically we could have included it, but we excluded it due to its weak momentum. As for the most expensive sectors, the leaders in this category were industrials and technology. We have not invested in technology since mid-2023, which turned out to be a bit premature. However, in the past we held positions in the tech sector and benefited from it for a long time, until it became too expensive for the model. We will continue to rotate across sectors over time following our systematic model. One of the main differences compared to traditional value investing is that we rely on relative valuation: we start by comparing a sector’s current valuation against its own long-term valuation, which allows us to compare different sectors against one another.
Why did you launch an ETF version?
There are several reasons. First, we launched the ETF in 2015, just over 10 years ago. This vehicle offers many advantages, including transparency and liquidity. Since it is a quantitative strategy, we did not want it to be a black box that we could alter. We wanted it to be fully quantitative, so it tracks an index, and fully transparent. This means that with the ETF, we publish the fund’s holdings daily. Thus, our clients know exactly what we are going to invest in and have complete transparency. Additionally, they have liquidity, as they can sell their ETF position even within the same day if they wish.
So is it an active ETF?
The distinction between active and passive ETFs is always a good question. Clients find it difficult to grasp. By law, if you are replicating an index—even an extremely complex one—it is a passive ETF. Regulation defines this ETF as passive because it tracks an index. However, the benchmark in question is quite different from the S&P 500. Consequently, tracking error exists: sometimes it outperforms the index, and sometimes it does not. So, in a sense, it acts like an active fund. Therefore, a gap exists between regulatory definitions (defining them as passive) and client perceptions (viewing them as somewhat more active, with the goal of beating the S&P 500).
Another of your flagship products is Serenity Ossiam. What does it consist of?
It is a strategy similar to a money market fund that aims to offer returns above money market rates without the credit and duration risks inherent in many traditional money market solutions. To achieve this, the fund uses synthetic replication and enters into total return swaps with leading banking counterparties. The fund holds a portfolio of assets, generally U.S. equities, but has no economic exposure to them, as their total return (positive or negative) is transferred daily to the investment bank via the swap. In exchange, the bank pays the fund the money market rate plus a spread. For corporations and large institutional investors, this represents a new way to generate yield on cash. Another advantage of these funds is their complete liquidity, with no entry or exit fees.
And do you plan to launch more ETFs?
Yes. We intend to launch many exchange-traded funds and mutual funds. We like to be innovative.
How have investors reacted to these types of products? Do they like ETFs in general?
At the end of the day, an ETF is still an investment fund. It is a fund where, beyond traditional investing, you can also buy or sell on an exchange. Therefore, for investors, there are only advantages. Provided there is no tax disadvantage—which we know differs slightly in Spain, though in other countries it is the same or even easier to access via online platforms. For instance, in Italy and Germany, ETFs are growing at a rapid pace. Instead of launching new investment funds, managers are issuing new ETFs.
And what is your take on the new account set to be approved in the European Union to encourage savers to become investors?
I see it as a good step in the right direction, but there remains a major need for financial education in general, depending on the country. How we manage retirement in Europe is very different from the United States. In the U.S., almost everyone has their own brokerage account, invests in equities, and understands how they work. In Europe, that is true in some countries, but not in others. Therefore, a significant need for education exists, and that role belongs not only to regulators, but also to asset managers, who must provide guidance and ensure that everyone understands the product.
Worldwide corporate dividend payouts reached a record $827.3 billion in the second quarter of 2026, marking a 7.9% increase compared to the previous year, according to the latest “Dividend Watch” report, which is part of the “Capital Group Global Equity Study.” Underlying growth, adjusted for exchange rates, extraordinary dividends, and other technical factors, was 7.5%, exceeding forecasts.
The second quarter is the peak of the global dividend season, and in 2026, dividends paid during this period surpassed the annual totals of previous years, an occurrence last seen in 2011. Growth was also broad-based: 88% of companies worldwide increased their dividends or kept them stable, with an average growth rate of 6%.
In the view of Alexandra Haggard, Head of Product for Europe and Asia-Pacific at Capital Group, global dividends accelerated in the second quarter of 2026, with solid growth across most regions and sectors, as well as strong increases from some of the world’s largest companies. “The boom in artificial intelligence is no longer just driving markets and stock prices; it is also contributing to generating record levels of cash returns for shareholders on a global scale. Active managers like Capital Group are well-positioned to identify companies across different sectors and regions that benefit from higher earnings growth, translating into record dividend payouts. In an environment of uncertainty, active management can help detect resilient companies that distribute dividends and offer investors a reliable source of income, while allowing participation in long-term corporate growth,” she explained.
Sector Trends
The fastest growth in dividend payouts occurred in the technology sector, where the underlying rate increased by 26.3% year-on-year in the second quarter. The artificial intelligence boom is driving strong earnings growth across the global semiconductor supply chain, translating into higher payouts to shareholders; half of the sector’s increase came from the global leader, based in the U.S. Technology is on track to become, for the first time, the second-largest dividend-paying sector behind financials in 2026.
The financial sector remains, for now and by a wide margin, the largest dividend payer. Dividend payouts from its entities increased by $26 billion USD (+10.1%) and were the largest contributors to the record registered in the second quarter. On the other hand, the mining recovery accelerated, helping its dividend payouts increase by 15.1%.
Regional Trends
Geographically, Japan and the broader Pacific region posted the highest dividend growth worldwide, thanks to improved corporate profitability, governance reforms, and constant attention paid to shareholders by publicly traded companies.
The second quarter marks the seasonal peak for dividends in Europe, representing 36% of total dividends paid during that period (compared to 21% for the full year). Underlying growth, at 3.6%, was constrained by cuts in the automotive sector, although solid payouts from banks and financial institutions helped offset this weakness, backed by the sector’s strong recovery and its growing contribution to European shareholder income. And the United States recorded good growth, with an underlying rate increase reaching 8.7%, while emerging markets lagged behind at 4.7%, mainly due to reductions recorded in the Middle East.
For their part, Spanish dividends delivered an excellent performance in the second quarter of 2026, with total payouts reaching $19.4 billion / €16.6 billion, representing an increase of 16.6% in underlying terms (51.7% in nominal terms). Overall, the figure was in line with the 16.1% underlying growth recorded for the first half of 2026 as a whole. As in many other European countries, the financial sector was the main driver of this growth. All companies in our index increased their dividends or kept them stable year-on-year.
Outlook
The outlook remains positive. Capital Group has revised its global dividend forecast for 2026 upward to $2.23 trillion USD (from $2.20 trillion), representing total growth of 6.4% and an underlying increase of 6% (up from the previous 4.7%). Key factors driving this upward revision include higher-than-expected extraordinary dividends, the depreciation of the U.S. dollar, and a shift in dividend policy by a major U.S. semiconductor company.
Photo courtesyEdmond de Rothschild Headquarters in Monaco
Forty years after establishing itself in the Principality of Monaco, Edmond de Rothschild is moving to its new headquarters in La Condamine. This new 5,300-square-meter building will bring together the private bank’s 270 employees in Monaco under one roof, with the goal of fostering greater collaboration among teams and enhancing the client experience.
Edmond de Rothschild also tangibly reflects the uniqueness of its model. It will serve as the meeting point for multiple areas of expertise from across its Ecosystem: private banking, Edmond de Rothschild wines—displayed in a wine club—and the perfume house Caron, which is opening its first boutique in the Principality.
Forty Years of Presence in Monaco
Present in Monaco since 1986, Edmond de Rothschild takes a new step in its development in the Principality with the inauguration of its new headquarters, located opposite Place d’Armes and the La Condamine market. Built by SCI Esperanza and designed by J.B. Pastor & Fils, the building features eleven floors, seven of which are dedicated to Edmond de Rothschild’s offices.
Conceived as an elegant, open, and luminous townhouse, this new headquarters brings together all of Edmond de Rothschild Monaco’s private banking expertise: bespoke banking, discretionary management, advisory, real estate, wealth planning, and life insurance brokerage.
A Building Designed for Private Banking Operations
The workspaces, distributed between the first and fifth floors, have been designed to encourage knowledge sharing and close collaboration among teams. Abundant natural light, meeting rooms, gathering areas on each floor, and open circulation spaces contribute to creating a work environment tailored to combine precision, agility, and collective intelligence.
The ground floor, as well as the sixth and seventh floors, are dedicated to client reception. The building features eighteen reception rooms, some of them modular, in addition to two large landscaped terraces offering a 360-degree panoramic view of the Principality.
In this environment, the client experience reflects the standards of a luxury Maison: discreet and elegant spaces, carefully selected materials, meticulous attention to acoustics and lighting, and a smooth, comfortable journey at every stage of the visit. A valet parking service and a British-style taxi decorated in the Maison’s distinctive colors and made available to clients complete this experience, designed with the utmost care for detail.
Sustainable Architecture Integrated into the Urban Fabric
The building has earned the BD2M Bronze certification, the Monegasque certification for sustainable Mediterranean buildings. Created by the Principality’s Government, this certification evaluates buildings based on various environmental criteria, including insulation, material selection, and occupant well-being. Additionally, the building incorporates a system that helps optimize its energy consumption.
Its architecture draws inspiration from the characteristic Mediterranean style of La Condamine, featuring a brick facade with glazed tiles, facade cabochons, and wrought-iron balconies. The result is a building that seamlessly integrates into the urban fabric of an ever-evolving neighborhood.
A Family Ecosystem Gathered Under One Roof
Inside, the House’s heritage is expressed through subtle details: the red, blue, and yellow of the family coat of arms, the compass, the five arrows, and references to Château Clarke, Gitana, La Ferme des 30 Arpents, Megève, and Edmond de Rothschild wines.
Located on the sixth floor, the 25-square-meter Wine Club pays tribute to Edmond de Rothschild wines from France, Spain, New Zealand, Argentina, and South Africa. Designed as an intimate and welcoming space, it extends client relationships through a tasting experience reflecting the regions, expertise, and art de vivre characteristic of the House.
On the ground floor sits Caron’s first boutique in Monaco, an 83-square-meter space designed by Casper Mueller Kneer Architects under the artistic direction of Olivia de Rothschild. Exposed concrete, brushed metal, and subtle tones combine to create a sensory experience. At the center of the boutique, a monumental reinterpretation of Caron’s iconic perfume fountains pays tribute to one of the Maison’s historical traditions.
Ariane de Rothschild, CEO of the Edmond de Rothschild Group, commented: “For more than a century and a half, the spirit of Edmond de Rothschild has been an inspiration. We have remained true to its principles without losing sight of the importance of reinventing ourselves. It is this constant commitment that allows us to stay attuned to our times. This new headquarters expresses who we are at our core: an independent, family-owned group, mindful of places, traditions, and human relationships.”
For his part, Gérard Ohresser, CEO of Edmond de Rothschild Monaco, added: “This new headquarters allows us to gather our 270 employees under one roof, strengthen the bonds across our business lines and areas of expertise, and welcome our clients in the spirit of hospitality that defines our House. Designed specifically around our needs and ambitions, the building reflects our way of working: closeness to clients, high-quality interactions, attention to detail, and a strong ability to connect and integrate the various areas of expertise within our Ecosystem.”
The world changes at terrifying speeds, and financial markets do too; today there is a reason why every quarter investors await the financial results of Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla as if they were a leading indicator for the financial markets. No, it is not merely because they are seven of the most valuable companies in the world, but because a growing portion of global portfolios is exposed to them, directly or indirectly. Today, the Magnificent 7 are a genuine dilemma for asset managers, but there are dilemmas and then there are dilemmas; this one might not be entirely negative, but it has its own distinct peculiarities.
Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla—the Magnificent 7—do not only concentrate an extraordinary portion of U.S. market capitalization; the real impact is that because their results, artificial intelligence investments, and growth expectations determine the behavior of indices, ETFs, and investment funds.
Therefore, for managers, the challenge is no longer deciding whether to have exposure to the Magnificent Seven, but how much to hold, how to diversify it, and what to do if market leadership begins to broaden. An investor may have never purchased a single share of Nvidia, yet that does not mean they do not hold it within an S&P 500 ETF, a U.S. growth fund, a global equity strategy, a pension plan, or a portfolio managed by a wealth manager.
This is the true financial dimension of the phenomenon. The so-called Magnificent 7 have become one of the primary transmission mechanisms between the artificial intelligence economy and investment markets. In this sense, their most recent financial results—now that we are in earnings season—show that the story is entering a new phase: it is no longer just about how fast their revenues are growing, but how much money they are forced to invest to sustain that growth and who will ultimately capture the benefits of the AI revolution.
Too Big to Be Ignored
According to Vanguard data, the seven companies combined generated approximately $2.2 trillion in revenue during 2025—a scale that helps explain why they ceased being a mere group of tech companies to become a macroeconomic and market factor. Concentration has also altered the nature of diversification; a fund tracking a market-cap-weighted index may hold hundreds of stocks, yet a significant proportion of its risk and return can end up depending on a relatively small group of companies.
This phenomenon concerns even major asset management firms. BlackRock, for instance, acknowledges that the U.S. market is at historically elevated levels of concentration and posits that the challenge for investors is finding exposure to AI growth without remaining excessively concentrated in today’s mega winners.
T. Rowe Price, for its part, has directly addressed the concentration problem created by the Magnificent Seven and its implications for portfolio construction. That is, the question is no longer whether the Magnificent Seven are good companies, but how much additional risk holding all of them introduces. Nevertheless, all seven are companies that cannot go unnoticed under any circumstances; together or apart, they are simply too big to ignore. Below is a brief summary of why that is the case.
Nvidia: The Company That Turned AI into Financial Results
If one company had to be chosen to represent the transformation of the stock market phenomenon into a financial reality, it would be Nvidia. On August 26, the company reported results for its fiscal 2027 second quarter. The numbers are extraordinary: revenues of $96.2 billion, up 106% year-over-year; Data Center revenues of $89.0 billion, up 117% year-over-year; GAAP net income of $59.7 billion, up 126% year-over-year; and a gross margin of 75%. The company expects revenues of approximately $108.0 billion for its fiscal third quarter.
For asset managers, however, there is an even more important figure: Nvidia is not merely selling chips; it is becoming the primary financial beneficiary of the massive capital expenditure cycle in artificial intelligence infrastructure. The company noted that AI infrastructure buildouts continue to accelerate and anticipated revenue growth of approximately 70% for fiscal year 2028, though it pointed out that its outlook remains supply-constrained. That shifts the conversation within investment funds: Nvidia is no longer just a technology play, but a bet on the capital expenditure of the entire technology industry.
Microsoft: The Other Side of the Boom
Microsoft represents the second major component of the equation: enterprise monetization of AI. In its fiscal year 2026, the company recorded the following figures: $331.8 billion in revenue, up 18% year-over-year; $155.2 billion in operating income, up 21%; and $133.7 billion in net income, a 31% increase. Azure and other cloud services grew 43% during the fourth quarter, according to company data. Meanwhile, Microsoft Cloud reached $214.4 billion in revenue for the fiscal year.
A figure of particular importance to an asset manager is that Microsoft closed the fiscal year with $678.0 billion in commercial remaining performance obligations—a signal of the tremendous visibility it holds over future revenues. But another factor is at play: the company is deploying massive amounts of capital into AI infrastructure, and its margins are beginning to feel the shift in business mix. For investors, a fundamental question emerges: How much of current AI capital expenditure will translate into profitable growth, and how much will weigh on cash flow?
Amazon and Alphabet: When AI Begins to Consume Cash
That same question emerges even more clearly at Alphabet and Amazon. Alphabet raised its 2026 capital expenditure guidance to a range between $195.0 billion and $205.0 billion, up from a previous guidance range of $180.0 billion to $190.0 billion. The company explained that the increase stems from the need to accelerate capacity to meet demand, but it also cautioned that technical infrastructure investments will drive up depreciation and data center operating costs while keeping cash flow under pressure.
This has a direct consequence for asset managers. Until now, the narrative could be summarized as: more AI investment = more growth. Now it is shifting toward: more AI investment = more growth, but also higher capital intensity and cash flow pressure. Amazon exhibits the same phenomenon. In the second quarter of 2026, its sales grew 20% to $200.6 billion, while AWS surged 37% to $42.2 billion. Operating income increased 43% to $27.5 billion.
However, its trailing 12-month free cash flow turned negative to -$7.6 billion, primarily driven by a $66.1 billion increase in purchases of property and equipment, fueled mainly by artificial intelligence investments. For a fund manager, this is a crucial distinction: revenue growth can remain extraordinary while free cash flow temporarily deteriorates due to capex. The question is when that spending will begin generating sufficient returns.
Meta Shows the Cost of the Race
Meta provides another example. In the second quarter, its revenues grew 28% to $60.8 billion, but its costs and expenses rose 55%. The result was a 14% decline in net income to $15.8 billion. The company spent $31.1 billion on capex during the quarter, while generating just $784 million in free cash flow.
For fund managers, this introduces a new variable: the market can no longer evaluate the Magnificent Seven solely through valuation multiples; additional factors must be scrutinized, including capex, depreciation, free cash flow, return on invested capital (ROIC), top-line growth, operating margins, energy consumption, data center demand, and, increasingly, the capacity to monetize AI models.
Apple and Tesla Break Group Uniformity
Signs indicate that the Magnificent Seven no longer behave as a homogeneous block. Apple reported record third-quarter fiscal 2026 revenues of $109.4 billion, up 16% year-over-year, driven by double-digit growth across iPhone, Mac, and Services. Tesla, by contrast, presented a far more complex picture. In the second quarter, it generated $28.2 billion in revenue, up 26% year-over-year, but its operating income fell 57% to $398 million, with its operating margin narrowing to 1.4%. Its capex surged 142% to $5.8 billion, resulting in a negative free cash flow of -$1.1 billion.
This highlights something important: the seven companies are no longer a single trade. Apple represents ecosystems, devices, and services; Microsoft and Amazon represent cloud and enterprise software; Alphabet represents search, advertising, and cloud; Meta represents advertising and social platforms; Nvidia represents AI hardware infrastructure; and Tesla represents electric vehicles, energy storage, autonomy, and robotics. That is why Vanguard cautions that the “Magnificent Seven” label can obscure critical differences among their underlying business models.
The Dilemma for Funds: To Hold or Not to Hold
The influx of figures and business models creates a genuine dilemma for asset managers. An active manager who drastically reduces exposure to the Magnificent Seven risks lagging their benchmark if Nvidia, Microsoft, or the others lead market rallies once again. Conversely, a manager maintaining elevated exposure risks significant relative underperformance if market breadth expands toward small-cap equities, traditional sectors, or international markets. Concentration has become a core risk management issue, not merely a stock selection decision.
BlackRock points out that while the U.S. market is at historical concentration levels, earnings growth prospects are beginning to broaden beyond the Magnificent Seven. The firm notes that the rest of the S&P 500 could narrow the EPS growth gap relative to the mega caps during 2026. As a result, market participants are asking whether it is time for asset managers to seek out the “Magnificent 8, 9, 10…”, as capital may begin migrating from the initial winners to their direct suppliers—a broadening of the investment universe that BlackRock is already highlighting.
In its outlook for the third quarter of 2026, the asset management firm notes that investors are seeking opportunities in the infrastructure, energy, and industrial layers supporting the expansion of AI beyond first-order beneficiaries, which could mark a major transformation for active management. If the first phase of the boom was about buying the mega-cap tech winners, the second phase may focus on identifying the supplier ecosystem capturing the next dollar of capital expenditure—a transition that is already reshaping portfolio construction.
The impact reaches directly into ETFs and index funds. A market-cap-weighted S&P 500 ETF automatically increases its exposure to companies as their market valuations rise. That means an extraordinary rally in Nvidia does not merely benefit direct shareholders; it also increases its weight within numerous index products. Thus, concentration can turn into a self-reinforcing loop: the stock rises → its market capitalization grows → its index weight increases → funds tracking the index must buy more exposure → capital continues to concentrate. This does not necessarily mean an automatic mechanism continues to push the stock higher, but rather that market capitalization dictates how passive capital is allocated. This phenomenon has reached the point where Nvidia accounts for roughly 8% of the S&P 500, according to data recently cited by MarketWatch.
For asset managers, this makes true diversification a far more complex concept. A fund may hold 500 constituents and still remain heavily exposed to the same underlying narratives: AI, cloud computing, semiconductors, digital advertising, and U.S. mega-cap equities.
The Big Question for 2027: What Is AI Really Worth?
Today, the issue is not that the Magnificent Seven are producing weak operational results; on the contrary, their figures remain extraordinary: Nvidia has doubled its revenues, Microsoft grows at a double-digit pace, Amazon is accelerating AWS, Alphabet is ramping up infrastructure investments, Meta is driving strong top-line growth, Apple posts record quarterly revenues, and Tesla is committing growing amounts of capital to AI, autonomous driving, and robotics. However, expectations are now so elevated that the market demands these investments produce increasingly higher returns.
BlackRock summarized this in its 2026 outlook, warning that AI-related capital expenditure has reached a scale large enough to carry macroeconomic implications, while the revenues derived from those investments will arrive with a lag. For fund managers and wealth administrators, the Magnificent Seven represent both an opportunity and a concentration risk.
The opportunity lies in participating in one of the largest technology investment cycles in history; the risk is that much of the market is already fully positioned in it. The next phase of asset management may not center on whether the Magnificent Seven will continue to win, but on discovering which companies will profit as the capital currently flowing into the Magnificent Seven spreads across the rest of the economy.
Photo courtesyChristophe Younes, Senior Executive Director at Carmignac.
Carmignac has inaugurated a new office in the Dubai International Financial Centre (DIFC) after obtaining authorization from the Dubai Financial Services Authority (DFSA) to conduct regulated activities. The firm has also appointed Christophe Younes as Executive Director of Carmignac Middle East Ltd and Head of Middle East.
This initiative marks an important milestone in Carmignac’s international expansion strategy and reinforces its long-term commitment to the region. The DIFC offers a robust regulatory framework, internationally recognized legal standards, and an efficient business environment, making it an attractive location for asset managers with a long-term strategic outlook, such as Carmignac. Dubai’s growing influence as a financial hub, supported by the Dubai Economic Agenda (D33), further strengthens its position as a regional center.
Based in Dubai, Christophe Younes will contribute to the development of Carmignac’s distribution in the United Arab Emirates and across the broader region, focusing on strengthening relationships with institutional and wealth investors. He will be supported by an experienced board of directors, which includes Habib Achkar.
Younes rejoined Carmignac earlier this year from PIMCO, where he was responsible for capital raising for the firm’s public and private investment strategies in France and Monaco, working primarily with private banks and family offices. Previously, he worked at Carmignac for 10 years, starting as a fixed income product specialist before moving to a sales role managing banking and institutional clients across France and Monaco. He is fluent in English, French, and Arabic. He holds a degree in Finance from Paris-Dauphine University and is a CFA charterholder.
Habib Achkar worked for over 30 years at Morgan Stanley, where he held various senior management roles, including Head of the Paris Trading Floor, Managing Director of Morgan Stanley Saudi Arabia, CEO of Morgan Stanley MENA, and ultimately Vice Chairman. He is the founder of Marcory Advisors Limited and joined Carmignac’s board of directors in 2024.
Carmignac’s investment capabilities encompass a broad spectrum of strategies: equities, fixed income, multi-asset, alternatives, and private markets. Its conviction-driven approach positions it well to protect the long-term interests of clients in the United Arab Emirates and across the GCC seeking diversified portfolios amid changing market conditions.
The decision to open a new office in the United Arab Emirates reflects Carmignac’s confidence in the country’s long-term growth prospects and its ambition to build lasting partnerships with local and regional investors in one of the world’s most dynamic and rapidly growing wealth management markets.
Rose Ouahba, Managing Director and Board Member of Carmignac Gestion Luxembourg and Carmignac Middle East, commented: “The opening of a dedicated office in Dubai marks a major milestone in Carmignac’s international ambitions. Building on our extensive experience serving private banks and institutional clients across Europe, we look forward to bringing our expertise to the United Arab Emirates, while learning from local and regional institutions.
I am delighted to welcome Christophe back to the team. His experience advising private wealth clients internationally makes him the ideal person to lead our expansion in this strategically vital and rapidly evolving market. His humility, technical expertise, and passion for this project have been a true source of inspiration as we embark on this new chapter.”
Christophe Younes added: “I am honored to lead the opening of Carmignac’s Dubai office, our first physical presence in the Middle East and the foundation for long-term growth in the region. As one of the world’s most dynamic and advanced financial hubs, backed by an ambitious economic agenda, Dubai offers active, agile, high-conviction asset managers like Carmignac unprecedented access to some of the most sophisticated and demanding investors globally. We look forward to making a meaningful contribution to the local investment ecosystem through our knowledge, expertise, and commitment to building long-term relationships.”
