The man tasked with making investment decisions on behalf of Coutts clients has expressed confidence in large corporates’ capacity to continue to generate strong earnings, despite the threat of further geopolitical shock in the Middle East and afar. Fahad Kamal, Chief Investment Officer at the historic British bank, articulated this optimistic outlook during the launch of Coutts’ 2026 mid-year investment outlook. His remarks suggest a strategic pivot towards resilience and proactive planning in response to an increasingly volatile global landscape.
Kamal’s assessment comes at a time when geopolitical tensions, particularly in regions like the Middle East, have introduced significant volatility into global markets. The ongoing conflict and its ripple effects have prompted a widespread reassessment of supply chains, energy security, and international trade routes. However, Kamal posits that this very uncertainty is spurring a constructive response from businesses and nations, fostering a stronger, more adaptable global economy.
Resilience Through Contingency Planning
"I guarantee you that five years from now, the dependence of anybody on the Strait of Hormuz is going to be much, much, much less," Kamal stated during the presentation. This bold assertion underscores his belief in the power of foresight and strategic adaptation. He elaborated, "Everybody is going to have a plan B, a plan C, a plan D, a plan E." This proactive approach to risk management, he argues, will not only mitigate the impact of future disruptions but also create a more robust foundation for sustained corporate growth.
The CIO’s confidence is rooted in the observed behavior of global corporations and consumers. He noted that in the wake of recent geopolitical shocks, a significant number of nations, businesses, and individuals have been actively developing contingency plans. This strategic foresight, he believes, is a testament to enhanced resilience and preparedness across various sectors. Kamal’s perspective suggests that the era of assuming stable global conditions is over, and that businesses are now embedding adaptability into their core strategies.
A Positive Earnings Backdrop
Despite the prevailing geopolitical headwinds, Kamal remains bullish on the prospects for corporate earnings. "There’ll be further shock, but we continue to see a really positive backdrop for earnings," he affirmed. This optimism is supported by his observation that "Consumers are strong, corporations are stronger than the balance sheets. Everything is looking pretty good." This assessment suggests a fundamental strength in the global economy that is capable of weathering external shocks.
The report underpinning Kamal’s statements provided concrete data to support this view. US-listed companies, for instance, reported an average earnings growth of approximately 27% year-on-year during the first three months of 2026. This figure significantly surpassed the initial prediction of 12% growth, indicating a more dynamic and resilient corporate sector than many had anticipated. This robust performance was attributed, in part, to a "pro-risk mood" among investors, a sentiment that Kamal expects to persist despite ongoing global instabilities.
Coutts: A Legacy of Wealth Management
Coutts, a venerable institution with a history dating back to 1692, has long been a trusted name in private banking and wealth management. Historically serving prominent figures, including royalty and literary giants, the bank has maintained its reputation for discretion and sophisticated financial advice. As part of the NatWest Group, Coutts is currently undergoing significant strategic expansion. In February 2026, the group announced its agreement to acquire Evelyn Partners, a wealth manager with approximately £68.6 billion in assets under management. This acquisition, expected to be integrated under the Coutts brand, aims to create one of the largest wealth management entities in the UK, with a combined Assets Under Management (AUM) of around £117 billion. This strategic move signals Coutts’ commitment to bolstering its market position and expanding its service offerings in an increasingly competitive landscape.
The integration of Evelyn Partners is expected to enhance Coutts’ capabilities and reach, providing a broader platform for delivering its investment strategies to a larger client base. The focus on large corporates and their earnings potential aligns with the strategic objectives of such a consolidated wealth management powerhouse.
The AI Revolution and Investment Opportunities
The Coutts report also highlighted the burgeoning opportunities within the Artificial Intelligence (AI) sector. Markets at the forefront of AI infrastructure are identified as particularly promising for investors. South Korea, a nation with a heavily technology-focused economy, serves as a compelling example. Its stock exchange, the Kospi, has experienced a remarkable surge, with its value increasing by over 100% in the year to date in 2026. This performance exemplifies the potential for significant returns in sectors driven by technological innovation.
However, the report also sounded a note of caution regarding the concentration of risk within the AI market. It observed that a small number of companies were responsible for a disproportionately large share of AI’s market performance – accounting for 62% of gains in the early part of 2026. This concentration means that the overall market can be significantly impacted by the fortunes of a few key players. Such a scenario necessitates careful due diligence and a nuanced understanding of individual company performance within the broader AI ecosystem.
Navigating Emerging Market Sensitivities
Beyond the technological frontier, the report also addressed the vulnerabilities of emerging markets, particularly in light of rising energy costs. The ongoing US-Iran conflict has contributed to an increase in energy prices, a factor that can disproportionately affect emerging economies. These nations are often more sensitive to hikes in energy costs, which can impact inflation, consumer spending, and overall economic stability. This suggests a need for investors to maintain a differentiated approach to emerging market investments, carefully considering their exposure to energy price volatility.
The Art of Timing in Investment
Kamal concluded his remarks with a crucial piece of advice for investors: the importance of precise timing. "Being early means being wrong. You’ve got to be right, and at the right time," he emphasized. This adage encapsulates the delicate balance required in investment strategy, where identifying promising opportunities is only half the battle. Executing these investments at the opportune moment is critical to realizing their full potential and avoiding premature or ill-timed commitments. This suggests that while identifying long-term trends like AI is important, understanding market cycles and entry points remains paramount.
The overarching message from Coutts’ mid-year investment outlook is one of measured optimism, underpinned by a belief in corporate resilience and strategic adaptation. While acknowledging the persistent threat of geopolitical instability, the bank’s CIO indicates a forward-looking strategy that embraces contingency planning and leverages technological advancements, while remaining mindful of market concentrations and macroeconomic sensitivities. The expansion of Coutts through the acquisition of Evelyn Partners further signals a commitment to providing robust wealth management solutions in an increasingly complex global financial environment. Investors are encouraged to remain vigilant, informed, and strategically patient, aligning their actions with both emerging opportunities and potential risks.
