Timely commentary, strategic perspectives and in-depth analysis from our investment teams to help guide your portfolio decisions.
We anticipate modestly above-trend growth in 2026 and take a pro-risk tilt in portfolios. We remain overweight equity in the U.S., Japan, and parts of the emerging markets. On duration our stance is neutral, but with a steepening bias. We underweight USD.
Against the backdrop of a geopolitical and energy market shock, we significantly reduce the probability of economic expansion (still marginally our base case) and increase the likelihood of contraction. We see better risk-reward at the front end of the Treasury curve and find opportunity to go up in credit quality.
The outlook for corporate profits is healthy. After a strong year of returns, we don’t see much room for valuations to rise further. Many of our investors are now a little more cautious on technology but still see big opportunities for stock selection within the sector.
Factors rose on average in 4Q 2025, some to all-time highs, led by international developed market equity factors and the value factor. Macro factors were mixed: While momentum rose, dispersion in commodity markets dragged on the carry factor.
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