Commentary

Fourth Quarter 2026 Active Equity Allocation Report

Fidelity's quarterly active equity allocation analysis.

By: Anna Piralkova Claire Xu

Updated: 10/19/2026

Key Takeaways

Active equity indicators declined modestly for most global indexes amid higher oil prices, lingering geopolitical uncertainty, a widening consensus that rates could stay higher for longer, and concerns about the safety of artificial intelligence.
Monthly return dispersion fell for three of six indexes we track, retreating from the elevated levels reached in July and interrupting the upward trend observed earlier in the year—particularly for EAFE and EM.
However, stock-level return correlation fell to the bottom 4% since 1994, suggesting increased opportunities for security selection across indexes.
Large-cap U.S. stocks demonstrated the largest number of positive indicators, but historically high concentration remained a concern.
Index volatility appeared contained for the S&P 500 index, although this masked elevated return dispersion and increased volatility at the security level.

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Fourth Quarter 2026 Active Equity Allocation Report

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