Navigating the shift from momentum to fundamentals
The global macro context in early 2026 remains characterised by uncertainty, yet market returns over the past year have remained robust. However, a closer look at the data reveals that multiple expansion has played an outsized role in these returns, often overshadowing company fundamentals.
The multiplier effect
Alan Christensen, President of Sarofim & Co., our partner manager on the Amplify Global Equity Fund, notes that nearly 40% of recent global returns resulted from multiple expansion, specifically P/E ratios. Historically, this contributor would be less than 10%. “What you’re not seeing is companies with very strong fundamentals outperforming in this type of market,” Christensen explains. He suggests that as momentum shifts, the market will likely return its focus to companies with strong, sustainable profit growth.
Finding value in structural inflections
The Amplify Global Equity Fund remains positioned in dominant companies within structurally attractive industries. From Alphabet and Meta to industrial leaders like industrial manufacturing company, John Deere, the focus remains on ”moats“ and broad profit drivers.
Even within the prevalent AI narrative, the Sarofim team remains disciplined. ”Investing is about wisdom and judgment,” Alan says, pointing to the firm’s legacy of navigating market cycles since 1958. By focusing on free cash flow and real profit growth rather than thematic hype, the fund aims to provide a more resilient journey through global volatility.
Success in 2026 will not be defined by those who react to the noise, but by those who have the conviction to stay disciplined within it.
