Jean-Pierre Couture of Desjardins Global Asset Management argues that a decade-long, US-led equity market phase is unwinding. Supply chain reorganisation, a reset in US trade policy, and the ai investment race have widened cross-country return dispersion enough to make country, sector, and currency allocation the primary return drivers again. DGAM's three-vector top-down framework has been in place for more than 30 years and is designed to capture exactly this kind of regime shift.
Top-down equity allocation at Desjardins Global Asset Management (DGAM) sets country, sector, and currency exposures before selecting individual securities. The process relies on three vectors: economic environment, valuation, and investor sentiment. Jean-Pierre Couture, senior portfolio manager, global top-down strategies and economist at DGAM, says the approach has been in active use for more than three decades. "We gain exposure to compelling themes through country, sector, and industry choices, using baskets of securities that best reflect our convictions," Couture says. "We do so through a process that has been proven over more than 30 years and that has performed very well over the past five years." Widening regional return dispersion and tightening index leadership are what make this discipline particularly well-suited to conditions in 2026.
All three of DGAM's vectors point against US equities simultaneously in 2026. Cap-weighted global indices have become concentrated, momentum-driven portfolios anchored in a handful of US mega-cap technology and communication-services stocks. Jean-Pierre Couture puts the risk plainly: "When a market is expensive, highly concentrated, and overweighted by virtually everyone, it generally does not offer an attractive risk–return profile." He adds that the outperformance of international equities since early 2025 could mark the beginning of a long rebalancing cycle. The dollar's devaluation already signals a measurable decline in interest in US financial assets, reinforcing all three vectors at once. "Concretely, this is one of the reasons why we are currently underweight US equities," Couture says. "There is little room for error."
Supply chains spent roughly 25 years being optimised around cost. Now they are being rebuilt around resilience, political alignment, and access to specific technologies. Jean-Pierre Couture is careful to distinguish reorganisation from reversal. "There is no deglobalization; rather, there is a reorganization of global trade and supply chains," he notes. That shift, combined with the US tariff war, has widened cross-country return dispersion back to levels not seen since before the globalisation wave of the early 2000s. Geography is once again doing more of the work in equity returns, making regional positioning a meaningful source of alpha rather than an afterthought. "Country allocation is a very useful lever in a world that has once again become multipolar," Couture says. DGAM's economic environment vector translates that view directly into regional weightings.
Index concentration is historically high, but Jean-Pierre Couture acknowledges the pattern is not new. "The concentration of global equity indices is indeed very high today, but this is not the first time such a phenomenon has been observed," he says. What makes 2026 distinct is how concentration combines with stretched valuations and crowded positioning across institutional and retail portfolios alike. When all three forces align, the payoff structure turns asymmetric against holders of passive, index-hugging exposures. Already-embedded optimism caps the upside when good news arrives, while negative surprises hit hard. "Under such conditions the outcome becomes asymmetric: good news has little upside impact on prices, while bad news could come as a surprise," Couture says. His conclusion is not to exit large-cap technology outright, but to refuse to treat any concentrated index as a neutral, risk-free default.
DGAM positions the current ai cycle in what Jean-Pierre Couture calls the investment race phase, characterised by heavy capital spending, a widening field of competitors, and mounting pressure on profitability. Historical precedent from railways and internet infrastructure shapes the view directly. "Periods of market euphoria surrounding major technological innovations have not ended because of macroeconomic shocks or sudden increases in interest rates; they have ended due to intensifying competition and the erosion of profitability," Couture says. He expects Asian rivals, particularly Chinese firms, to push harder with more affordable or faster-to-market alternatives, compressing margins at today's leaders. "Large companies will survive, but they will no longer be alone and may no longer be the leaders," Couture says. The portfolio response is to gain ai exposure across a broader set of regions, supply chain layers, and adjacent industries rather than concentrating in a handful of names.
The three vectors at DGAM operate at different speeds, and that gap creates opportunity. Economic environment and valuation shift slowly and set the strategic direction. Investor sentiment can move fast, and that is typically where specific entry points appear. When a segment falls sharply out of favour and the price reaction looks exaggerated relative to underlying fundamentals, the process calls for action. Jean-Pierre Couture cites a live example from the current year. "A prime example in 2026 is the software industry," Couture says. "Based on all three of our vectors, the correction was exaggerated, and we have taken advantage of this to build a position." Implementation uses diversified baskets of multiple securities, reducing idiosyncratic risk while capturing the full thematic exposure the macro view calls for.
Jean-Pierre Couture frames the DGAM strategy as a complement to bottom-up managers rather than a replacement. Traditional stock pickers face real pressure when index returns are driven by a handful of mega-cap names and retail capital flows that pay little attention to fundamentals. "Because traditional managers rely on security selection, disciplined portfolio construction, and risk management, they tend to underperform equity indices that are now expensive and overly concentrated," Couture notes. A top-down, macro-aware process supplies a lowly correlated stream of returns through diversified country, sector, industry, and currency exposures, filling a gap that security selection alone cannot address. "A multipolar world is truly our natural habitat," Couture says. The combination is built to help Canadian institutional clients hold up across a wider range of market regimes, regardless of which single geography or sector leads.
Jean-Pierre Couture: senior portfolio manager, global top-down strategies and economist, Desjardins Global Asset Management; team originated at Hexavest prior to its acquisition by DGAM; Montreal-based.