FidelityConnects: Global and U.S. Equities Update: What’s ahead?

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Hello, and welcome to Fidelity Connects.

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I'm Glen Davidson. The question for 2026 may

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not be whether the US economy slows but whether

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policymakers are willing to let it run hot.

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After years of narrow leadership dominated by mega-cap

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tech  investors are wondering if in 2026 the

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market can, or will, broaden beyond the Mag-7.

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Is the US consumer more resilient than headlines suggest

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or more stretched than are pricing in?

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Joining me now to help us make sense of it all and share

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how he's navigating today's landscape for tomorrow is

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Fidelity US Chief Investment Officer and portfolio manager,

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Chris Lee. A reminder that today's webcast features

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live French audio interpretation.

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Chris, great to see you.

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Glen, thanks for having me.

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Nice to be here.

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Chris, you are in Boston right now because that's where

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you're domiciled.

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As a reminder to our viewers you are

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CIO of multi-asset strategies and the

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US growth portfolio managers including Mark Schmehl.

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You've got a lot that's coming at you.

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Can you give us some scope about the people that are

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underneath you that you deal with every day?

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I have the great fortune of touching a broad range

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of investors across our organization.

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My two main roles, as you mentioned, number

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one I'm the CIO

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and a portfolio manager within our multi-asset strategies.

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These are team managed strategies where I work with a

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number

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of

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senior PMs that specializes investing in

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sector, so about twenty of those, who are also very

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connected to the research team.

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In addition, I'm the CIO of the growth team here

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including folks like Mark Schmehl.

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There I get to work with some of the most experienced

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investors who are investing some large pools

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of capital in the growth universe.

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An incredible number of people and aspects to your

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job every day so that makes it even more important that we

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have you here today to talk about 2025, what

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all happened, but also what we should all look forward to

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and what you're looking forward to in 2026.

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Why don't we start there. Chris, can you give us a recap of

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2025, and we only have 28 minutes or so.

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Sure, so I'll try to be quick but a lot happened in 2025.

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I'd say in a word, I describe 2025 as resilient

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in terms of the market.

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You might recall the beginning of the year really started

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with a fair bit of volatility.

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We had The DeepSeek moment which called into question

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a lot of the investing that was going into the AI space,

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whether that was, in fact, going to be necessary or

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durable.

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Then as you went into the spring had volatility induced

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by the tariff headlines and

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the changing assumptions around that and what that meant,

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ultimately, on the economic growth both

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in the US and globally.

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We saw a point-to-point drawdown

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if we look at the S&P 500 as a proxy of

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over 20%.

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Subsequent to that we had a significant rally

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to finish the year at all-time highs.

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That was underpinned

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by ultimately strong economic growth and

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a resumption of enthusiasm around the AI trade.

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That really sets the table for where

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to go from here in 2026.

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That was a great summary of a very,

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very busy year.

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That allows us lots of time for more questions, and a

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reminder to our viewers, if you have any questions please

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do send them in and I'll get them on my monitor here.

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You talked about AI, you talked about DeepSeek which was, I

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think, in January or February of 2025 which was very

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tumultuous for the market.

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Let's go on to AI as a theme and your thoughts.

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AI is clearly important, both as a driver of the

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overall economy as well as the market.

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If you look at the S&P 500 again the top 10

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stocks represent about 40% of the index today.

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Most of those stocks are in the technology, com services

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or AI-related in nature.

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We have great recognition, I

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think, that AI is a generational

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platform shift from a technology standpoint.

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It's a profound

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capability that I think will really impact both

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consumers and enterprises in a very significant way

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but it's very compute intensive and requires a lot of

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resources including power and other

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things that really haven't had a ton of investment up to

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this point. That resetting of the

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growth and demand curves have really

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powered a lot of the stocks that are in that supply

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chain.

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One of the questions as we enter 2026 is

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where and how will those investments

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pay off? What is the return going to be on the tremendous

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amount of capital that's being deployed, not just in

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compute but also data centre infrastructure

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and the underlying investment

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that's required to support this product cycle.

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I think that's gonna be a very important

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topic as we progress through 2026

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and, in particular, have a

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big impact as a result of its size in the index on how the

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market overall does perform.

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I suppose a big factor now, certainly we've heard about it

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the last couple of days, is power for

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data centres, as an example, and should that

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extra cost be beared by the

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consumer or should it be by the tech companies.

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That's something, obviously, causing a bit of gyration in

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the market. I've got to ask, you started at Fidelity, if

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I recall correctly, around 2004 and you were

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responsible — and this is just after the tech meltdown

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— and you were responsible for analyzing semiconductor

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stocks.

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When you were doing that, it was a crazy time, obviously,

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think about when you started to do that and where

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semis are today.

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Can you compare and contrast for us

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what it means to you as someone who really had your

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formative part of your career in that world?

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It's been really great to reflect on how the industry has

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changed over the past couple of decades.

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I think number one there's been tremendous consolidation on

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the supply side.

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When I was covering semiconductors back in the early 2000s

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every company, or many companies, were building their own

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what they call fabs.

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They were vertically integrated and they produced

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and manufactured their own chips.

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What happened with Moore's Law was that

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the manufacturing expertise

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became much more specialized and that part of the

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manufacturing or value chain became outsourced

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and the industry overall become much more vertically

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segmented.

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Fast forward to today, you've got big companies like Taiwan

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Semiconductor which is the world leader in manufacturing

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chips and their customers are

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design houses essentially, Nvidia that

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we all know about, Broadcom, even AMD

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which had their own factories for a long period of

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time is now largely a

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fabless company.

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That's had pretty interesting implications

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around the pace of innovation, number one,

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and number two, the cyclicality

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of the industry where there isn't

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necessarily as much boom-bust kind

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of contours from over

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supply and over capacity going to under

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supply and under capacity.

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It must be fascinating for you to keep an eye on

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considering your foundation at Fidelity and where the world

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is today. Leadership's really been on a few

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key companies if we look at the S&P, what do you think

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about the S&P 493 as we

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start in 2026?

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That's a great question, Glen, and I think something that's

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going to be very pivotal as we traverse this

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year. If you look at the relative

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earnings growth rate of the,

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let's call it Mag-7, as a proxy for sort of the AI

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cohort and the rest of the

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S&P 500, the 493 as you termed it, those

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rates are starting to converge if you look at consensus

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estimates where the Mag-7 is expected to grow

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earnings in the 20% plus or minus range.

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That's actually a deceleration from

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the past few years, still good but slightly

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slower relative to what we saw in 2024

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and 2025.

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We live in a relative world and that sets up an interesting

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question as to what and if there could be

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a handoff in terms of market leadership from,

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as you mentioned, the Mag-7 or the large companies

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to the rest of the index.

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There's a number of fundamental kind of underpinnings

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that might support that as well.

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For example, the Fed started cutting

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interest rates and that tends to be

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better and benefit companies that are more in the old

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economy realm.

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Within that that also tends to be favourable for smaller

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cap companies.

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Overall, it wouldn't

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be surprising to see some transition

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in leadership given those set of conditions that

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we just talked about.

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You talked about interest rates and we should talk about

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inflation. There's a feeling now that maybe interest rates

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are done.

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Things may be different in the US as far as influence and

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so on so maybe interest rates could go down.

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Inflation was steady relative to December.

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I think coffee and lettuce went up but everything else

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stayed quite stable.

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Comments on inflation in general and what that may mean for

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interest rates.

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Inflation in an absolute sense is still

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above where the Fed is targeting.

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It's kind of 2+, if you will, closer to 3.

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However, it's obviously come down from very elevated levels

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over the past couple of years.

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I think there's a lot of concern about the effect

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of tariffs and what that might do to

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inflation. On the other hand, and this is

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sort of a dual mandate of the Fed and the conundrum that

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they're sort of faced with, there's

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a labour environment where we are in this low

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fire but low hire environment. You can argue whether

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it's stable or perhaps it's getting weaker on

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the margin.

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With elevated inflation

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but perhaps a weakening labour market there's

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a tug of war going on in terms of what the Fed's

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next move could be. I think the market is appropriately

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pricing in a couple of cuts for this year

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but that, again, is another pivotal question that will

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determine and have an impact on how the

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markets ultimately perform this year.

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Just to be clear, you said they've priced in appropriately

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a couple of cuts this year.

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Yeah. I think if you look at the range of information

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we have available to us today

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inflation is still relatively tame though it's

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above the Fed's target so that might argue against

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letting the economy run too hot, as they say, with

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too many cuts. On the flip side

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with labour starting to slow

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on the margin that might argue

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to cut rates. I think kind

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of the market is sort of

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taking a middle of the road approach in balancing those

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two considerations.

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Makes sense. You mentioned tariffs, let's pick up on that.

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That was a big topic in 2025.

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Looks like as of today China's reporting that they're still

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running a surplus because they're dealing with

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different trading partners.

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Maybe that's a real result of the tariffs that

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were imposed is that countries are saying, hey,

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we'll look at the rest of the world and see if we need to

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readjust. Is that a valid point?

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For sure. I think the longer, or very long run

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implications, will be some alteration

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and changes in terms of global trade flows

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for sure. I would say as it pertains to the market maybe

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for 2026 the issue

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of tariffs has, I think,

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been much more absorbed into market expectations.

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I can actually

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see as one of the risks, and this

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could play out in the near term, is, as you know, the

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legality of tariffs is up for consideration with the

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US Supreme Court. We're expecting a decision here any day.

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I think

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the outcome if they're repealed could actually just

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introduce uncertainty and the

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actual implementation of tariffs has

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been, as I said, pretty much absorbed by the market and if

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we go back to an environment where there's just great

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uncertainty about what's going to happen next  that

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does run the risk of, I think, causing maybe

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companies to pause or slow down any

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initiatives, hiring investment, until they see how this

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thing plays out.

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It's an interesting

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setup with tariffs where you might think

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as a knee-jerk reaction that, oh, if the tariffs are

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repealed this will be good for the markets because

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companies won't have that burden from a profitability

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standpoint.

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If you kind of go one step further, these are

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not unlikely to go away entirely and

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so we're going to be a little bit back to the environment

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we were in in the spring of 2025.

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<b>Hello, investors. We'll be back to the show in just a moment.</b>

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<b>else you get your podcasts. Now back to today's show.</b>

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Uncertain times, indeed.

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We've had a question come in about comments on US dollar

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weakness.

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I think there are a lot of things that are feeding into

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that dynamic.

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I think the US fiscal

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situation certainly is a big part of that consideration.

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I think for

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the US dollar and its prospects going forward,

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I think a lot of the fiscal questions will

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end up being one of the prevailing considerations in

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terms of how that impacts the dollar.

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When we talk about dollar, we talk about uncertainty and so

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on, how do you as a leader of such a big group

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help your team digest the frequency

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of information, the volatility

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of information?

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You've seen a number of cycles within the marketplace

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having started at Fidelity in '04 and your career, I think,

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late '90s in this business, how do you help

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your team and therefore a message for our advisors,

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our viewers on how to deal with all of this stuff.

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A couple things. Number one, we're very fortunate and

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blessed to have a breadth of resources and

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experts across asset classes, geographies,

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and certainly our fundamental research team here in

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equities to digest, synthesize

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and be able

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to draw investment conclusions from a lot of

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information quickly.

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That's number one. Number two, we have a culture of

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collaboration.

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One example is the Venezuela news

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that came out over the New Year's, effectively, our first

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firm-wide meeting when we came back was dedicated to

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that event. What does it mean for geopolitical

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landscape and what's

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changed and what might the implications be?

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What does that mean for oil and the

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companies that are participating in the oil supply chain?

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Are there beneficiaries?

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Who are the incremental losers?

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How does that change over time horizon?

16:59.800 --> 17:02.960
In the near term it might be good for

17:03.000 --> 17:05.520
certain players but over the long term it could be a

17:05.560 --> 17:06.560
negative.

17:08.400 --> 17:11.600
The market, as we've just been talking about,

17:11.600 --> 17:14.560
has a lot of things that we're always dealing

17:14.560 --> 17:17.160
with. There's, it feels like, an endless stream of

17:17.160 --> 17:20.160
volatility and we feel very fortunate to have

17:20.160 --> 17:23.160
this broad but very collaborative

17:23.160 --> 17:25.520
team to help sort through those issues.

17:25.520 --> 17:28.560
When I'm working with folks directly I think one

17:28.560 --> 17:31.480
of the challenges in this job, in this role, is to really

17:31.480 --> 17:34.440
also isolate into things that matter,

17:34.440 --> 17:38.000
what's really going to matter for

17:38.000 --> 17:40.440
the investment choices that we're making?

17:40.440 --> 17:42.920
At times sometimes the headlines may be outsized relative

17:42.920 --> 17:46.080
to the economic or market impact.

17:46.080 --> 17:48.360
We're always trying to think through that to really

17:48.360 --> 17:51.680
understand and make sure that we are reacting

17:51.680 --> 17:54.760
appropriately and really drilling down into

17:54.760 --> 17:57.800
the one or two things that really matter in that moment.

17:57.800 --> 17:59.800
It sounds like strength in numbers is a big plus.

17:59.800 --> 18:01.920
Working in a silo would be tough.

18:01.920 --> 18:04.520
There's a lot of challenge, I'm sure, respectful challenge

18:04.520 --> 18:07.680
that the portfolio managers and analysts put upon

18:07.680 --> 18:10.800
one another to talk about different potential

18:10.800 --> 18:13.880
scenarios and almost plans for 2026

18:13.880 --> 18:16.280
and beyond. I know Mark Schmehl has talked about before,

18:16.280 --> 18:18.040
and I don't know if you've done this yet already this year

18:18.040 --> 18:21.160
or when these happen, having come from San

18:21.160 --> 18:23.800
Francisco to Boston and everybody does their pitches, does

18:23.800 --> 18:25.960
their ideas and challenges one another.

18:27.080 --> 18:29.360
It creates a lot of group think which is really solid.

18:29.360 --> 18:32.200
One of the points you mentioned was looking at oil just

18:32.240 --> 18:33.840
given what's happened with Venezuela.

18:33.840 --> 18:35.440
Let's talk about oil. What are your thoughts?

18:38.360 --> 18:41.320
Oil as a resource overall

18:41.320 --> 18:44.520
is a depleting resource and

18:44.560 --> 18:47.440
the world is moving away from oil.

18:47.480 --> 18:50.400
I'd say the long term structural outlook, you have to take

18:50.400 --> 18:53.440
that into consideration where the demand curve is

18:53.480 --> 18:56.480
headed in one direction  but at the same time and

18:56.520 --> 18:59.600
simultaneously you're depleting this finite

18:59.640 --> 19:00.640
resource.

19:01.520 --> 19:03.880
I think that's one long term framing.

19:03.880 --> 19:07.080
For us, and to bring it back into a relevant

19:07.080 --> 19:10.040
investment timeframe, we're looking at overall

19:10.040 --> 19:11.240
supply-demand dynamics.

19:12.560 --> 19:15.720
We've had areas of supply that

19:15.720 --> 19:18.680
have been curtailed over the past several years.

19:18.680 --> 19:21.880
I think US fracking, for example,

19:21.880 --> 19:24.360
has been proven to be uneconomic.

19:24.360 --> 19:30.200
I think you've seen OPEC

19:30.200 --> 19:32.680
be perhaps a bit more disciplined.

19:34.440 --> 19:37.480
Another consideration is just sort of the political

19:37.480 --> 19:40.880
backdrop. Obviously, our administration here in the

19:40.880 --> 19:44.440
US is attacking affordability broadly as

19:44.440 --> 19:47.640
an important near term issue.

19:47.640 --> 19:50.760
Within that are things like oil prices and what

19:50.760 --> 19:53.640
consumers are paying at the pump and maybe what types of

19:53.640 --> 19:57.280
things are they trying to do to ensure that

19:57.280 --> 20:00.560
affordability of gasoline remains as

20:00.560 --> 20:03.640
low as it can be in the context of market

20:03.640 --> 20:06.800
forces. A lot of different things in terms

20:06.800 --> 20:07.800
of the

20:11.680 --> 20:13.920
outlook for oil. We'll see how things play out in

20:13.920 --> 20:16.920
Venezuela. They have some of the largest

20:16.920 --> 20:19.560
proven reserves globally, as we all know, largely untapped.

20:19.560 --> 20:20.560
It will

20:22.920 --> 20:26.240
take time but potentially that may enter the global supply

20:26.240 --> 20:29.400
picture once again and what does that mean overall

20:29.400 --> 20:31.360
for the supply-demand outlook for oil?

20:31.360 --> 20:34.520
What's interesting is the demand for

20:34.520 --> 20:37.120
oil has been very stable and steady.

20:37.160 --> 20:40.920
Despite all of our efforts to perhaps move off of oil

20:40.960 --> 20:43.960
that really hasn't — EVs, et cetera

20:43.960 --> 20:47.120
— that hasn't really impacted the demand curve

20:47.160 --> 20:48.480
as of yet.

20:48.480 --> 20:52.480
I think we all know it's coming but in the near term

20:52.520 --> 20:55.200
we haven't seen as dramatic an impact as perhaps we might

20:55.200 --> 20:57.000
have thought a couple years ago.

20:57.040 --> 20:58.960
A lot of things to consider with respect to oil

21:00.000 --> 21:03.040
in the very near-term is pulled back a fair bit off of

21:03.040 --> 21:04.040
the ties. Again,

21:06.120 --> 21:08.640
some long term considerations with respect to the supply

21:08.680 --> 21:10.440
outlook but in the  near term

21:11.800 --> 21:14.880
perhaps we're getting closer to equilibrium.

21:16.040 --> 21:18.840
For consumers we're, I'm sure, all very happy to see a bit

21:18.840 --> 21:21.280
of a break at the pump over the last few weeks and now it

21:21.320 --> 21:24.120
seems as of today things are on their way back up but

21:24.160 --> 21:25.640
that's the nature of that commodity.

21:25.640 --> 21:27.840
Let's talk about the consumer.

21:27.880 --> 21:30.480
Many would say it's a K-shaped economy.

21:30.480 --> 21:34.240
Consumers have, well, I'll leave that with you.

21:34.240 --> 21:36.080
What are your thoughts on the consumer overall and the

21:36.080 --> 21:37.080
health of that area?

21:39.160 --> 21:42.200
It's a good segue from our discussion on oil.

21:42.200 --> 21:45.760
You're right, it has been a bit of an uneven recovery,

21:45.760 --> 21:49.120
let's say, with respect to broadly, the US Consumer.

21:49.120 --> 21:52.440
Some term it the K-shaped recovery where the

21:52.440 --> 21:56.080
upper end of the consumer distribution has

21:56.080 --> 21:57.760
done a lot better.

21:57.760 --> 21:59.440
They tend to be the ones that are exposed to capital

21:59.440 --> 22:01.480
markets and other assets like homeownership that

22:02.640 --> 22:04.600
have all appreciated and therefore they all benefit

22:05.960 --> 22:08.960
from that to a larger degree than the lower end consumer.

22:08.960 --> 22:13.000
I think there's certainly some truth to that.

22:13.000 --> 22:16.000
As we look into 2026 I think that there's perhaps

22:16.000 --> 22:19.200
reason to consider if that trend could

22:19.200 --> 22:22.680
converge. Number one, you have, as we mentioned,

22:22.680 --> 22:26.160
the prospects of lower oil which is essentially

22:26.160 --> 22:29.240
a tax break to a greater proportion

22:29.240 --> 22:32.200
and has a greater impact for folks at the lower

22:32.200 --> 22:36.200
end of the income cohort. You also have the

22:36.200 --> 22:40.280
implementation or the effects of the OBBA

22:40.280 --> 22:42.960
stimulus bill that was passed last year.

22:42.960 --> 22:46.120
This will take shape in the form of things like

22:46.120 --> 22:49.640
outsized tax refunds that, again, will be proportionally

22:49.640 --> 22:52.600
directed at the lower end of the income

22:52.600 --> 22:55.200
cohort, no taxes on tips, et cetera.

22:56.600 --> 23:00.200
You have a number of tailwinds that will

23:00.200 --> 23:03.240
ostensibly help the low end to

23:03.280 --> 23:05.520
a greater degree and may lead to some convergence in terms

23:05.560 --> 23:07.800
of that K-shaped recovery that we've experienced so far.

23:09.320 --> 23:12.600
Can we talk about the debt level of

23:12.600 --> 23:14.400
consumers? Do you have any comments on ...

23:14.400 --> 23:16.800
it seems like there's a prevalence of buy now, pay later

23:16.800 --> 23:17.800
programs.

23:18.160 --> 23:21.160
People are leasing a lifestyle, if you will, and then

23:21.160 --> 23:22.880
they're going to pay the price for that.

23:24.720 --> 23:27.960
There's talk of even capping credit card

23:27.960 --> 23:31.040
rates which could cause more people to start getting

23:31.040 --> 23:33.760
into areas they shouldn't. Is that a risk for the economy

23:33.760 --> 23:35.880
right now that people are buying things they shouldn't and

23:35.880 --> 23:37.920
they've got to deal with that down the road and it's gonna

23:37.920 --> 23:38.920
be painful.

23:40.720 --> 23:43.680
It's interesting. I think in the very

23:43.680 --> 23:46.400
near term the large banks who have big credit card

23:46.440 --> 23:49.200
portfolios have been reporting and the credit trends seem

23:49.200 --> 23:50.520
very, very stable.

23:50.520 --> 23:53.360
I think memories run very long with respect to credit

23:53.400 --> 23:56.560
cycles. The underwriting discipline

23:56.600 --> 23:59.680
that they've instituted since the Great Financial Crisis of

23:59.720 --> 24:01.520
2009 has really persisted.

24:01.560 --> 24:04.480
That's number one. It's true that credit card

24:04.520 --> 24:07.560
debt nominally has reached new highs.

24:07.560 --> 24:11.040
Back in 2007 I think it was about a trillion dollars

24:11.040 --> 24:14.160
and in 2025 we exceeded a trillion dollars.

24:14.160 --> 24:17.080
Now, you have to put that number in the context.

24:17.080 --> 24:18.920
It's taken a long time, over

24:20.040 --> 24:23.360
15 years, for that to get back to these levels.

24:23.360 --> 24:25.680
As a percentage of GDP it's actually a much smaller

24:25.680 --> 24:26.960
proportion.

24:26.960 --> 24:30.480
I would say that the overall indebtedness

24:30.480 --> 24:33.800
of the US consumer is still very

24:33.800 --> 24:34.800
manageable.

24:35.680 --> 24:38.880
It's been really an issue of low real

24:38.880 --> 24:42.320
wage growth and other factors that

24:42.320 --> 24:46.160
I think have been more of a headwind and

24:46.200 --> 24:49.440
I guess I'm a little less concerned about just overall

24:49.480 --> 24:52.960
indebtedness though it is higher than it has been over

24:52.960 --> 24:54.480
the past several years.

24:54.480 --> 24:55.720
Well, that's very encouraging.

24:55.720 --> 24:58.400
Now, we only have a few minutes left and I'd be remiss if I

24:58.400 --> 25:01.600
didn't dig into a bit of your portfolio manager

25:01.600 --> 25:04.400
role, which is on the Advanced US Equity Fund.

25:04.400 --> 25:07.040
I'll just remind our viewers this time last year, maybe it

25:07.040 --> 25:10.080
was this week, you and I and Gil Haddad, who's on the

25:10.080 --> 25:13.320
quantitative side, did a webcast and it was at the launch

25:13.320 --> 25:16.280
time of the Advanced US Equity product.

25:16.280 --> 25:18.640
I'll remind our viewers, Fidelity is made up of

25:18.640 --> 25:20.680
quantitative research, technical research, fundamental

25:20.680 --> 25:23.680
research. You, Chris, are responsible

25:23.680 --> 25:25.920
for portfolio managers who are involved in fundamental

25:25.960 --> 25:28.920
research. Gil, when he did the webcast with us,

25:28.960 --> 25:31.440
represents quantitative research.

25:31.440 --> 25:34.400
The Advanced US Equity Fund is an overlay of

25:34.400 --> 25:37.480
the two. Now, we're a year into it, we can't

25:37.520 --> 25:39.240
talk numbers and all sorts of other things because it

25:39.280 --> 25:41.640
hasn't completed its year, could you talk about that

25:41.640 --> 25:44.640
mandate, set the scene for us and just talk about if

25:44.680 --> 25:46.760
it's behaved as you've expected over the last year.

25:48.760 --> 25:52.320
This is a really innovative product that really combines

25:52.320 --> 25:55.280
two capabilities that are world-leading, I think,

25:55.320 --> 25:56.880
within Fidelity, as you mentioned.

25:56.880 --> 26:00.080
We have the fundamental team and the unique research

26:00.120 --> 26:03.200
insights that we've been developing for many

26:03.200 --> 26:05.200
years, for many decades now.

26:05.240 --> 26:08.560
We have, it's no longer emerging, it's an established

26:08.560 --> 26:11.520
quantitative research capability that

26:11.520 --> 26:13.440
we're marrying together in this product.

26:14.480 --> 26:17.480
What it does is it systematically sources

26:17.480 --> 26:20.600
and harnesses the best ideas from

26:20.640 --> 26:24.040
the fundamental side but uses some

26:24.080 --> 26:27.400
quantitative overlays to construct a portfolio that

26:27.400 --> 26:30.240
is really well-balanced from a risk-reward and construction

26:30.280 --> 26:33.840
standpoint to really try and

26:33.880 --> 26:36.720
package, if you will, the best of Fidelity research in a

26:36.720 --> 26:38.120
unique way.

26:38.120 --> 26:41.240
This is very complementary to the types of portfolios

26:41.240 --> 26:44.440
that are run perhaps by fundamental

26:44.440 --> 26:47.400
PMs but in this case we're

26:47.400 --> 26:52.160
using quantitative risk simulations

26:52.200 --> 26:55.440
and algorithms to package that

26:55.440 --> 26:58.760
same IP in a unique fashion.

26:58.760 --> 27:00.280
As we look at the portfolio

27:02.000 --> 27:06.240
it's performed very much as we would have expected.

27:06.240 --> 27:09.360
The process, more importantly, I think, is yielding a very

27:09.360 --> 27:12.560
unique and complementary sort of a package

27:12.600 --> 27:15.840
of the ideas

27:15.880 --> 27:19.440
that our research team has been surfacing.

27:19.440 --> 27:21.640
Well, it's great to hear of the synergy between the two

27:21.640 --> 27:24.080
areas and for our viewers, if you want to dig more into the

27:24.080 --> 27:26.320
quantitative side of Fidelity, which is a whole other

27:26.320 --> 27:29.320
webcast, do check out any of the broadcasts

27:29.320 --> 27:31.560
with Gil Haddad or with Neil Constable.

27:31.560 --> 27:33.360
They're very, very interesting.

27:33.360 --> 27:36.520
It's, I'm sure, a luxury for you in your position

27:36.520 --> 27:39.560
to be able to use all of these resources to be portfolio

27:39.560 --> 27:41.080
manager on this solution.

27:41.080 --> 27:43.680
Just a couple of minutes left, I'll just ask you, Chris,

27:43.680 --> 27:46.680
what should we all be looking forward to or looking towards

27:46.680 --> 27:48.440
for 2026 as investors?

27:51.080 --> 27:53.560
I think we touched on a lot of the

27:54.600 --> 27:57.600
main themes to be on the

27:57.600 --> 28:00.400
lookout for. I think there are, in summary, a lot reasons

28:00.400 --> 28:04.720
to be optimistic about 2026

28:04.720 --> 28:06.920
despite the fact that we've had a number of good years in

28:06.920 --> 28:10.040
the US markets. We talked about AI.

28:10.040 --> 28:13.200
We talked about the prospects for the consumer

28:13.200 --> 28:15.880
and a broadening of recovery in there.

28:17.600 --> 28:19.720
The manufacturing, the old economy, if you will, as

28:19.760 --> 28:21.960
represented or embedded in the S&P 493

28:24.000 --> 28:27.000
is seeing signs of life as well.

28:27.000 --> 28:29.280
Balanced against that are some of the risks that we touched

28:29.280 --> 28:32.280
on, the geopolitical

28:32.320 --> 28:34.880
considerations which are much more on the forefront after

28:34.880 --> 28:37.200
the first week and a half of trading here

28:40.000 --> 28:41.440
in '26.

28:41.440 --> 28:42.960
There are some questions around Fed independence and what

28:42.960 --> 28:46.040
does that mean potentially for

28:46.040 --> 28:48.040
interest rates, inflation, et cetera.

28:48.080 --> 28:50.960
There are things out there, obviously, that balance some of

28:51.000 --> 28:54.080
the optimism but overall

28:54.080 --> 28:56.680
I think it's gonna be a really interesting year.

28:56.680 --> 28:59.520
No doubt. It sounds like more breadth, more diversity for

28:59.520 --> 29:02.760
2026 to the markets and not without risks

29:02.760 --> 29:04.720
but you and your team have a keen eye on those and it's

29:04.720 --> 29:07.560
great to hear. Chris, thank you so much for speaking with

29:07.560 --> 29:08.720
me and with our audience today.

29:11.000 --> 29:12.120
Great, it's great being here, Glen.

29:13.600 --> 29:17.520
<b>Thanks for watching or listening to the Fidelity Connects</b>

29:17.520 --> 29:21.680
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29:50.480 --> 29:54.280
<b>The views and opinions expressed on this podcast are those of the participants,</b>

29:54.320 --> 29:58.240
<b>and do not necessarily reflect those of Fidelity Investments Canada ULC or</b>

29:58.240 --> 30:02.240
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30:02.240 --> 30:04.800
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30:22.240 --> 30:24.400
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30:24.400 --> 30:26.080
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