409. AI debt, stubborn inflation and the search for real diversification

Markets have delivered another strong quarter, but beneath the headline returns there are important shifts taking place. The next instalment of our quarterly market update, with Darius McDermott and Juliet Schooling Latter, explores the revival in UK smaller companies and commodities, stubborn inflation and the prospect of higher interest rates. We examine the extraordinary sums being spent on AI, rising debt among technology companies and whether investors are less diversified than they realise. The conversation also turns to bonds, where shorter-duration opportunities are looking increasingly attractive, before assessing UK equity valuations and the areas offering potential away from AI. Finally, we reveal which markets and sectors could provide opportunities as we head towards 2027.

What’s covered in this episode: 

• UK smaller companies finally deliver
• Commodities take the lead
• Higher rates for longer
• Inflation refuses to behave
• The enormous AI spending boom
• AI hyperscalers turn to debt
• Who actually profits from AI?
• Hidden portfolio concentration
• Finding genuine diversification
• Opportunities beyond the AI trade
• Bonds back on the radar
• The case for short-duration bonds
• Are UK equities still cheap?
• India’s difficult two years
• The outlook for commodities
• Opportunities heading into 2027

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Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.