AI Summary
5 min readJeremy Schwartz, global CIO at WisdomTree, explains how geopolitics has overtaken traditional factors like interest rates and inflation as the main market driver in 2026. Conflicts in Iran and Russia-Ukraine, tariffs, and policy shifts create volatility but also identifiable winners through targeted ETFs that capture trends like defense spending and ally-focused trade.
Geopolitics Shift from Noise to Catalyst
Geopolitics now dominates headlines, with events like Trump tariffs, Supreme Court rulings, and conflicts moving sectors rapidly. Previously, Fed decisions led; now policy tweets and resolutions do. Investors should avoid knee-jerk cash moves, as volatility hides upside catalysts. WisdomTree's geopolitics team, including Sam Rhines managing GRAP portfolios, identifies mispriced opportunities by focusing on big narratives: wars, allies, and administration priorities like AI and energy. Short-term catalysts (e.g., Venezuela easing for Chevron) guide positioning, with ongoing monitoring for developments like tariff relief.
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What you'll learn
- 1 (01:00) **Geopolitics as Market Driver** - Hosts introduce Jeremy Schwartz and explain shift from Fed/inflation focus to policy/geopolitical events like tariffs, Iran, Russia-Ukraine.
- 2 (04:14) **Why Geopolitics Matters Now** - Schwartz details 2026 changes: tariffs uncertainty, conflicts in Iran/Russia-Ukraine, Trump policies overriding Fed headlines.
- 3 (06:15) **Investment Thesis from Geopolitics** - Discusses avoiding defensive cash reactions, identifying winners/losers like energy (Chevron overweight then trimmed after oil +40%).
- 4 (08:12) **Signal vs Noise in Markets** - WisdomTree's geopolitical team (GRAP portfolios, GEOA ETF) focuses on big narratives: wars, allies, tariffs, AI/energy ties.
- 5 (10:29) **Defense Tech Super Cycle Defined** - Long-term military modernization in Europe/Asia (NATO 5% spending, Japan/Korea/India vs China) beyond short-term bumps.
- 6 (15:21) **Asia/Europe Defense ETFs** - WDAF (Asia Defense, +26% YTD) and WDEF highlighted as top performers capturing re-arming trends.
- 7 (18:42) **Friendshoring to Allies** - Shift from cheapest suppliers to secure allies (Japan, India, Poland); underweight China in emerging markets.
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Show Notes
In this week's episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz sit down with Jeremy Schwartz to discuss geopolitics given the rising tensions between the US and Iran.
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Disclosure:
Important Information from WisdomTree:
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing.
This must be proceeded or accompanied by a prospectus offer. For a prospectus or, if available, the summary prospectus containing this and other important information about the fund, call 866.909.9473 or click here. Read the prospectus or, if available, the summary prospectus carefully before investing.
There are risks involved with investing, including the possible loss of principal.
To view standardized performance and learn more about WDAF, WTIP & WTV holdings, and other details, please visit the WDAF, WTIP or WTV fund page.
For definition of terms used in this discussion, please see the WisdomTree Glossary.
Jeremy Schwartz is a registered representative of Foreside Fund Services, LLC.
WisdomTree Funds are distributed by Foreside Fund Services, LLC.
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