Outlook | 2026
In a Nutshell
Economic Outlook
Macro risk shifts from “no growth engine” to “one over‑crowded engine”: policy, regulation, and capital‑allocation decisions around AI will shape both regional performance and the balance between real‑economy gains and financial‑market excess.
U.S. growth shifts from exceptionalism to “slow but positive,” with tariffs and policy uncertainty acting as a drag rather than an outright shock. Europe and Japan emerge as incremental contributors rather than outright laggards, while China remains a structural weak spot.
Tariffs pose upside risks to U.S. and emerging market inflation, while Europe anticipates disinflation from subdued demand; so overall sticky but not accelerating dynamics.
Artificial Intelligence (AI) attenuates the downside in long‑term productivity and potential growth assumptions, especially in advanced economies, and partly offsets tariff and demographics headwinds.
Key Risks
Inflation may rebound due to supply disruptions, strong demand, or wage pressures, complicating central bank easing paths despite disinflation forecasts.
Elevated tensions raise odds of trade wars, and commodity spikes, with US-China frictions and tariffs curbing global trade volumes. Europe faces export weakness from US policy shifts.
Sovereign debt pressures from loose policies, populism, and defence spending could trigger bond sell-offs and tighter conditions. Equity corrections loom from high valuations and earnings misses.
Investment Convictions
We maintain a pro-risk stance as we enter 2026, favouring equities primarily amid the expected Fed easing and global growth. However, we are also aware of the potential for policy volatility.
A dovish monetary cycle, which represents a tailwind for rate-sensitive assets, such as small-cap stocks with a U.S. focus and emerging markets, is undeniably supportive of various asset classes.
We remain underweight in interest rate risk (duration) and core government bonds, favouring credit selectively and considering less directional credit exposure, such as long/short strategies.
The US dollar is likely to weaken further in Q1, driven by Fed rate cuts that are expected to be even more aggressive than currently anticipated, due to the anticipated change at the Chair level, which will narrow the yield differentials with peers such as the ECB and BoE.
Finally, amid equity concentration and bond yield pressures, we remain committed to alternatives and gold to make our portfolios more resilient. Although Bitcoin and similar cryptocurrencies are now part of our investment universe, we have limited conviction in them at this stage.
Table of contents
- OUTLOOK 2026 : IN A NUTSHELL
- 2H 2025 MACRO REVIEW : KEY HIGHLIGHTS
- OUTLOOK 1H 2026
- SCORECARD 2H 2025
- INVESTMENT CONVICTIONS 1H 2026
- ALLOCATION VIEWS