Bits & Pieces
Edition #287 | 10/07/2026
Most traded | Markets & Macro | Chart of the Week | Renk | U.S. ETFs | Retirement Planning in Focus
The signals coming out of the NATO summit in Ankara continue to point toward higher defence spending. That is likely welcome news for German military propulsion specialist Renk, which has just announced a landmark deal. We also take a look at what may be the most rewarding phase of investing: drawing down your wealth. Using the 4% rule, we explain how investors can harvest the fruits of their portfolio as efficiently and sustainably as possible. And while everyone knows the market heavyweights, we turn our attention to the hidden champions of the US stock market – the companies thriving beyond the front row.
Note: The data refers to the ratio of purchases and sales of the 100 most traded stocks on Scalable Broker between 03/07/2026 and 09/07/2026.
In the spotlight:
The ongoing roller coaster ride in oil markets continues to boost cash flows at TotalEnergies. But even without the geopolitical tailwind, business remains strong. The Paris-based energy giant benefits from its diversified energy mix, spanning traditional hydrocarbons as well as growing investments in electricity and renewables.
After reaching an all-time high in late March, the stock has pulled back somewhat, offering investors a chance to reassess one of Europe's largest energy companies.
Waiting for Warsh
Will Kevin Warsh get to enjoy the weekend? On Tuesday and Wednesday, the United States will release its June consumer and producer price data –
figures the Fed watches closely for clues about the direction of inflation. The newly appointed central bank chief has repeatedly stressed that “prices are too high”. For Warsh, bringing inflation under control remains the top priority.
The pressure is mounting. Core inflation, which excludes food and energy prices, most recently came in at 2.9% – still well above the Fed’s 2% target. Tariffs, relentless spending on AI infrastructure, and the ongoing conflict with Iran continue to keep price pressures elevated.
The upcoming inflation reports will therefore offer an early indication of whether Warsh may opt to raise interest rates at the next FOMC meeting at the end of July after four consecutive pauses – making borrowing more expensive across the economy.
Before the Fed takes centre stage, however, Wall Street will kick off second-quarter earnings season. As usual, the major US banks will be first to report.
Spend too much or too little?
Drawdown scenarios with four withdrawal starting points
Sources: MSCI ACWI, Scalable Chief Economist
Building wealth through earning, saving, and investing is important. But eventually comes the moment when you want – or need – to live off that wealth, whether to enjoy financial freedom or to close the gap left by retirement income.
That is when the famous 4% rule comes into focus. Research from the United States suggests that investors who withdraw 4% of their portfolio value at the start of retirement each year – and subsequently adjust that amount for inflation – can expect their savings to last for at least 30 years. However, when a portfolio is invested entirely in equities, the outcome is not always so straightforward:
- Had an investor begun withdrawing, according to the 4% rule, in 1973 or 1999, the severe market downturns early in retirement would have depleted the portfolio after roughly 20 years.
- In most other retirement scenarios derived from the MSCI AC World Index since 1970, investors would still have been left with substantial wealth after three decades. Starting in 1980, a globally diversified equity portfolio would have grown more than tenfold despite ongoing withdrawals. Beginning in 1991, it would still have increased by more than five times. In hindsight, the 4% rule would have been overly conservative – investors could have afforded to spend significantly more.
A pipeline packed with orders
A former arch-rival is set to become a subsidiary. German military drivetrain specialist Renk plans to acquire its British competitor David Brown Defence, currently owned by private equity firm Stellex Capital Management. The two companies once found themselves on opposite sides of history, supplying the German and British armed forces during the Second World War. In the decades that followed, their rivalry continued within NATO. For customers buying European-made battle tanks, the choice often came down to Germany’s Leopard 2, powered by Renk transmissions, or Britain’s Challenger. If approved by regulators, the deal would make Renk Europe’s dominant supplier of heavy military drivetrains.
- Expanding the fleet: The acquisition strengthens more than just Renk’s land-based business. It also provides access to British naval programmes with an order volume worth more than €820 million through 2030, as well as customers including the United Kingdom, Australia, and Canada.
- Full speed ahead: Business was already booming. Renk delivered the strongest start to a fiscal year in its history, reporting first-quarter order intake of €582.3 million, up from €548.6 million a year earlier. More than 90% of expected 2026 revenue has already been secured through existing contracts.
- Another growth lever: Global rearmament is also driving a surge in demand for maintenance services and spare parts. Renk is therefore placing increasing emphasis on its high-margin aftermarket business, where recurring revenues tend to be both profitable and resilient.
The company received an additional boost this week from the NATO summit in Ankara. US President Donald Trump once again urged European allies to increase defence spending significantly. It is safe to say that Renk has little reason to object.
Wall Street’s hidden champions
The headlines surrounding the AI-driven surge of America’s tech giants have been impossible to ignore. But beyond the spotlight, a second tier of companies is quietly delivering impressive results. The Russell 2000, the benchmark index for US small caps, has just recorded its strongest first half of the year since 1991.
The reason? The AI boom is spreading beyond Big Tech and increasingly benefitting the broader economy. Smaller companies operating in areas such as cooling systems, power infrastructure, and industrial equipment are seeing demand surge alongside the build-out of AI data centres. One example is fuel-cell specialist Bloom Energy. The enormous electricity requirements of AI infrastructure have provided a powerful tailwind for the stock in recent months. Investors can gain exposure to this trend through a Russell 2000 ETF. The index is not without risk – roughly 40% of its constituents are currently unprofitable, making it considerably more volatile than large-cap benchmarks. Yet these higher-risk companies have also been among the biggest drivers of the recent rally. An ETF helps spread that risk across approximately 2,000 holdings.
For more conservative investors, there are alternative ways to access the second tier of the US equity market. Companies must be profitable over the previous four quarters to qualify for inclusion in S&P indices. This requirement applies not only to the flagship S&P 500, but also to the mid-cap companies in the S&P 400 and the small-cap stocks in the S&P 600. As a result, these indices provide exposure to smaller US businesses while maintaining a stronger focus on profitability and quality.
Product-Highlight
Semiconductors, Hyundai and howitzers
In South Korea, the AI boom is setting the pace. Memory-chip champion SK Hynix, for example, is pursuing a secondary listing on Nasdaq to raise fresh capital for the increasingly expensive race to build next-generation AI infrastructure. Together with Samsung, the company is expected to invest around $1.3 trillion in South Korea's domestic AI ecosystem. Not surprisingly, these two technology heavyweights dominate South Korean equity benchmarks such as the FTSE Korea 30/18 Capped Index, where they account for more than half of the index weight.
Yet beyond the AI high-flyers lies a remarkably strong industrial base Hyundai Motor Group is the world's third-largest automaker by vehicle sales, trailing only Toyota and Volkswagen. At the same time, South Korea's defence industry is enjoying robust demand as NATO countries seek alternatives to suppliers burdened by long delivery times. Poland alone has ordered 360 K2 main battle tanks from Hyundai Rotem since 2022, with provisions that could expand the deal to as many as 1,000 vehicles. In addition, defence contractor Hanwha Aerospace has secured orders for a total of 672 K9 self-propelled howitzers.
The Franklin FTSE Korea UCITS ETF offers exposure to this combination of AI beneficiaries and industrial champions. The fund holds more than 150 South Korean large- and mid-cap stocks and comes with a total expense ratio of just 0.09% per year – making it one of the most cost-efficient ways to access the Korean market.
Why the Retirement account won't become “Riester 2.0”
In this section, we answer your most important questions about Germany's new Retirement account (AVD).
How does the AVD differ from Riester, and what prevents it from becoming “Riester 2.0”?
Four key changes have been designed to avoid the shortcomings of the old system:
- No more capital guarantees: Investors can benefit from the higher long-term return potential of growth-oriented investments such as ETFs instead of being constrained by costly guarantee requirements.
- Lower costs: By using a straightforward investment account structure, the AVD eliminates the need for complex and expensive insurance wrappers.
- Greater flexibility: The obligation to convert savings into a lifelong annuity has been removed. Investors can instead choose a flexible withdrawal plan during retirement.
- Simplicity: A standardised account structure and significantly simplified subsidy rules make the system far easier to understand and use.
The broader cultural shift is real: Capital markets are increasingly being viewed as a way to participate in the value created by the real economy. In this vision of retirement saving, the ETF investor becomes the new mainstream.
Editorial deadline: Friday, 7 a.m.
Sources: Scalable and dpa-AFX