CIO View Portfolio: Perspectives

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CIO View Portfolio: Perspectives

06/07/2026

In our monthly Multi-Asset update we show the implementation of our CIO View in the CIO View model portfolio.

Vincenzo Vedda

Chief Investment Officer

Overview

Idea of the month

Global banks remain a core pillar of the financial sector. Regional drivers such as U.S. deregulation, a robust economy in Canada, improving profitability in Europe and rising net interest income in Japan support earnings prospects. Over time, relative performance versus financial services has been volatile. After a period of outperformance by payment and other service providers until 2020, supported by business models and Covid effects, the trend has reversed since 2021. Stronger earnings momentum, rising dividends and relatively attractive valuations appear to support the case for banks. Additionally, the risk of disruptive AI effects is currently looming over financial services providers.

_{Source: Bloomberg Finance L.P., DWS Investment GmbH as of 6/26/26 (total return, indexed, 1/1/21=100)}

Our take on duration & risk

Risk

We maintain a neutral risk stance as near-term risks and opportunities remain broadly balanced. Equity markets have rallied on easing tensions around Iran, with potential for lower oil prices to support sentiment and ease bond yields. However, the rally remains narrowly driven, particularly by AI and semiconductor stocks, where positioning and high earnings expectations limit broader upside. Market sentiment appears neutral to slightly elevated, and technical indicators suggest only limited further gains. We therefore remain on the sidelines and would consider an upgrade only if market breadth improves or in the event of a correction of around 5%.

We stick to our risk preference at neutral

_{Source: DWS Investment GmbH as of July 1, 2026}

Duration

We maintain our +1 duration stance as the risk-reward profile remains attractive. Rates markets, in our view, overemphasize inflation risks while underpricing growth concerns. Supporting factors include our macro base case, stabilizing or declining oil prices limiting second-round inflation effects, and existing long positioning across fixed income. We maintain a positive outlook in U.S. Treasuries and Gilts, and retain a +1 stance on Bunds. Relative value favors U.S. and UK duration over Euro area exposure. Overall, we see too many hikes priced, particularly for the Fed, and continue to expect curve steepening supported by carry and rebuilding term premia.

We remain +1 on duration

_{Source: DWS Investment GmbH as of July 1, 2026}

What’s up in the segments?

We remain neutral on equities, with a +1 for utilities, emerging markets and Japan.

In equities, we confirm our overall neutral positioning, but continue to see pronounced differentiation across markets. Strong, AI-driven earnings momentum appears to be a key driver, although it is accompanied by narrow market breadth and elevated concentration. Against this backdrop, we favor Emerging Markets (+1) and maintain our +1 on Japan, supported by still solid earnings prospects, even as short-term catalysts remain limited. We stay neutral on the U.S. and Europe. On a sector level, we retain our constructive view on Utilities (+1), supported by rising energy demand linked to AI dynamics. In fixed income, our preference remains firmly skewed toward quality. We continue to favor Investment Grade over High Yield, particularly in Europe, where technical factors such as limited issuance and stable fundamentals are supportive. At the same time, valuations suggest that too many rate hikes – especially in the U.S. – are still priced in, impacting the overall risk-reward profile of the asset class. In FX, we remain neutral on the U.S. dollar in the short term, which is likely to trade in a range. Over the medium term, however, we remain cautious as differences in growth and monetary policy across major currency areas continue to narrow, reducing key drivers of dollar performance.

Treasury/Bund pick-up in 10- and 30-year maturities (hedged and unhedged, in basis points)

_{Source: Bloomberg Finance L.P., DWS Investment GmbH as of 6/29/26}

CIO View Model Portfolio positioning vs. anchor

This allocation shows how we implement the above-mentioned CIO View into a Multi-Asset portfolio of liquid securities.

This allocation may not be suitable for all investors and can be changed at any time without notice. Source: DWS Investment GmbH, as of July 1, 2026.The anchor allocation refers to the strategic asset allocation, while the portfolio positioning refers to the tactical asset allocation. Rounded figures. Including equity derivatives.

¹ Total excluding interest rate derivatives

² (derivatives are included in the positioning figures at a subordinate level).

CIO View Portfolio Perspectives

Miscellaneous Jul 2026

New

Semiconductors: good news already priced in

10/07/2026

AI is driving earnings and markets. But after the rally, the risk-reward balance is becoming more demanding

Berlin’s undersold big reform package

08/07/2026

Berlin’s 34‑point reform program could be a major success because it addresses a multitude of challenges. Patience might pay off for investors.

Inflation risks on the horizon

03/07/2026

Past El Niño episodes show agricultural prices can react late and unevenly. Nevertheless, the current risks need to be taken seriously.

CIO View

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as of 6/26/26; 104640_16