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Global Asset Allocation Viewpoints

A view from Canada

February 2026

Outlook

We maintain a balanced stance across global risk assets. Though valuations are slightly extended, earnings momentum and economic growth remain favorable, underpinned by still-accommodative fiscal policies across most regions
U.S. economic growth remains resilient fueled by AI-driven capital spending and supportive fiscal and monetary policies, although labor market data continues to reflect a softening.
Markets outside the U.S. continue to benefit from improving fundamentals, supported by fiscal spending, notably in Europe and Japan.
Canadian macro backdrop remains on positive trajectory, with fiscal stimulus coming alongside strengthening natural resources demand. However, trade and political uncertainty pose challenges.
Key risks to global markets include any threat to AI-driven growth, sticky inflation, a sharper-than-expected deterioration in labor markets, shifting policy expectations, and persistent geopolitical tensions.

The Asset Allocation Committee at T. Rowe Price maintains a balanced stance across global risk assets, favoring equities and cash over bonds amid resilient economic growth, driven by AI-related capital spending and supportive fiscal policies. While U.S. labor market data shows some softening, international markets—particularly Europe and Japan—benefit from improving fundamentals and fiscal spending. Canadian equity markets benefit from fiscal stimulus improving fundamentals, but stretched valuations warrant caution.

Key risks include potential threats to AI-driven growth, sticky inflation, labor market deterioration, shifting policy expectations, and geopolitical tensions. Tactical portfolio positioning reflects overweight exposures to small-cap equities, emerging market bonds, and cash, while maintaining underweight allocations to bonds and U.S. large-cap stocks, given extended valuations and possible upward pressure on yields.

The outlook stresses selectivity, especially in technology, as investors become more cautious about AI-related capital expenditures. The Committee's views are informed by a 6- to 18-month horizon and are not investment recommendations. Investors are encouraged to seek independent advice and consult relevant disclosures before making decisions.

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A view from Canada

Global Asset Allocation Viewpoints

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IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including ﬁduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, ﬁnancial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its aﬃliates receive revenue from T. Rowe Price investment products and services. Past performance is no guarantee or a reliable indicator of future results. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an oﬀer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may diﬀer from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon speciﬁc request. It is not intended for distribution to retail investors in any jurisdiction.

Canada - Issued in Canada by T. Rowe Price (Canada), Inc. T. Rowe Price (Canada), Inc.’s investment management services are only available to non-individual Accredited Investors and non-individual Permitted Clients as defined under National Instrument 45-106 and National Instrument 31-103, respectively. T. Rowe Price (Canada), Inc. enters into written delegation agreements with affiliates to provide investment management services.

Residents of Quebec may request a French translation of this document. Please contact CanadaTranslationRequests@troweprice.com. Les résidents du Québec peuvent demander une traduction française de ce document. S'il vous plaît contactez CanadaTranslationRequests@troweprice.com.

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