The end of the unipolar market

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A reorganization of global supply chains, a regime shift in US policy, and a frantic AI investment race are rebuilding the case for top-down allocation, says Desjardins Global Asset Management (DGAM)’s Jean-Pierre Couture

GLOBAL SUPPLY chains are being reorganized, US policy is entering a new regime, and the AI investment race is accelerating, rebuilding the case for top-down allocation, says Desjardins Global Asset Management’s Jean-Pierre Couture, whose team originated at Hexavest before its acquisition by DGAM. The unipolar equity market that defined the 2010s is unwinding. Cross-country return dispersion, which compressed during the globalization wave of the 2000s, has widened again since the US tariff war reset trade rules. Benchmarks have moved in the opposite direction. Cap-weighted global indices have become concentrated, momentum-driven portfolios anchored in a handful of US mega-cap technology and communication-services stocks, which means owning the index today is an active position on one country, one style, and one cluster of companies, at valuations and ownership levels that leave thin margins for error.

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“When a market is expensive, highly concentrated, and overweighted by virtually everyone, it generally does not offer an attractive risk–return profile”

Jean-Pierre Couture, Desjardins Global Asset Management

As Jean-Pierre Couture, senior portfolio manager, global top-down strategies and economist at DGAM, puts it, “When a market is expensive, highly concentrated, and overweighted by virtually everyone, it generally does not offer an attractive risk–return profile.” Widening regional dispersion and tightening index leadership push country, sector, and currency allocation back to the centre of the return equation, and that is the gap their top-down approach is built to address. The Montreal-based manager runs a global equity strategy organized around three vectors: economic environment, valuation, and investor sentiment. The framework has been in place for more than 30 years and is implemented through diversified baskets rather than concentrated single stock positions.

“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.” He positions the strategy as a complement to bottom-up stock pickers, arguing it adds “substantial alpha diversification” by drawing returns from macro dimensions that security selection rarely targets directly. From global cycle to regional differentiation Couture’s view is that geography is doing more of the work in equity returns than it has in roughly a generation. In the early 2000s, deepening globalization pulled markets into closer sync. The reverse trend is now visible in the data. “Country allocation is a very useful lever in a world that has once again become multipolar,” Couture says. For roughly 25 years, supply chains were optimized around cost. Now they are being rebuilt around resilience, political alignment, and access to specific technologies. “There is no deglobalization; rather, there is a reorganization of global trade and supply chains,” he notes.

He adds that the outperformance of international equities since the beginning of 2025 could well mark the beginning of a long rebalancing, with the dollar’s devaluation already illustrating a measurable decline in interest in US financial assets.

Innovation cycles and the AI boom The same framework shapes Couture’s view of the current AI cycle. “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, citing railways and internet infrastructure as precedents. “In both cases, demand appeared limitless, and the frantic race to invest ultimately undermined profitability.”

“Country allocation is a very useful lever in a world that has once again become multipolar”

Couture places AI in that investment race phase, with heavy capital spending and a widening field of competitors. Asian rivals, particularly Chinese firms, are expected to push harder, often with more affordable, less energy-intensive or faster-to-market alternatives. “Large companies will survive, but they will no longer be alone and may no longer be the leaders,” he says. For portfolio construction, that history argues for participating in the AI cycle through a broader set of regions, supply chain layers, and adjacent industries rather than concentrating the exposure in today’s leaders.

Turning macro views into positions The practical question is how this becomes trades. Within the top-down approach, the three vectors operate at different speeds. The economic environment and valuation evolve slowly. Investor sentiment can shift quickly and is often where the entry points show up. When a segment falls sharply out of favour and the price reaction looks exaggerated relative to fundamentals, the process calls for action. “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 is deliberately diversified, holding multiple securities to gain exposure to a theme.

Published Jun 15, 2026

Jean-Pierre Couture, Desjardins Global Asset Management

The information included in this article is presented for illustrative purposes only. The information presented should not be construed as investment advice, recommendations to buy or sell securities, or recommendations for specific investment strategies.

Couture is explicit that the strategy is meant to sit alongside bottom-up stock pickers, not displace them. Traditional managers can be squeezed when index returns are driven by a handful of names and by retail flows that pay limited 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,” he notes. His argument is that a top-down, macro-aware process supplies a lowly correlated stream of value added through diversified country, sector, industry, and currency exposures, helping clients hold up across a wider range of regimes. As Couture puts it, “a multipolar world is truly our natural habitat.” The argument is direct: treat macro dimensions as deliberate sources of return, or accept whatever exposure an increasingly concentrated index decides to assign.

The leaders of the last decade rarely remain the dominant companies

Source: Bridgewater, June 2024

Share of total market capitalization of the top 10 US companies, by decade

Source: DGAM, Robert J. Schiller, August 2025

The US stock market has rarely been so expensive

Average S&P 500 P/E ratios in real terms, adjusted for cycles (10 years)

The US tariff war, in his reading, was a shock that doubled as a catalyst. Those developments feed directly into the firm’s economic-environment vector and shape where it allocates risk. “Concretely, this is one of the reasons why we are currently underweight US equities,” Couture says. “This positioning is also justified by US equity market valuations relative to the rest of the world and by investor positioning: there is little room for error.”

When benchmarks stop being neutral Index structure, in the top-down framework, is treated as a source of risk rather than simply market context. Couture acknowledges that today’s concentration is not without precedent. “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 matters is how that concentration interacts with valuations and crowded positioning. When those forces align as they do today, Couture sees an asymmetric payoff. Optimism is already embedded in prices, capping the response to good news, while negative surprises can land hard. “Under such conditions the outcome becomes asymmetric: good news has little upside impact on prices, while bad news could come as a surprise.” The conclusion is not to step away from large-cap technology entirely, but to refuse to treat any single index as a neutral default and to allocate risk where the three vectors line up more favourably.