2026 Outlook: Fixed Income Views
A disciplined, quality-focused approach across fixed income and private credit can help position portfolios for balanced risk-adjusted returns in a challenging environment in 2026.
Authored by: Wade O'Brien
2026 Outlook: Diversifier Views
In 2026, a disciplined, diversified approach across hedge funds, real assets, and California Carbon Allowances can help investors navigate market uncertainty and capture emerging growth.
Should Investors Increase Core Real Estate Allocations Now That the Fed Has Resumed Easing?
No. Despite last week’s rate cut, we do not recommend that most investors increase their core real estate exposure.
After a Blistering First Half of the Year, Can Non-US Equities Continue to Outperform US Peers?
Yes, we believe a combination of attractive valuations, a shifting macro and policy environment, and stretched US profitability will allow non-US equities to continue outperforming.
Should Investors Add to High-Yielding Credit Allocations, Given the Recent Rise in Spreads?
No. We believe it is too early to add exposure to US high-yield bonds and broadly syndicated loans, as spreads for most assets are merely back to around their historical medians and could move higher from here if economic growth deteriorates.
Will President Trump’s Proposed Policy Initiatives Drive More US Large-Cap Equity Outperformance?
No, we don’t think so. While President Donald Trump made numerous campaign pledges that could be seen as beneficial, US large-cap stocks will need more than policy shifts to outperform US small-cap stocks in 2025.
2025 Outlook: Credit Markets
We expect liquid credit returns to decline due to low credit spreads and anticipated Fed easing. Direct lending returns should moderate but continue to outperform their liquid counterparts. Meanwhile, insurance-linked securities will continue to benefit from strong demand, and increased transaction volumes should support both specialty finance and credit opportunities managers. In emerging markets, currencies should become a tailwind for local bonds.
2025 Outlook: Real Assets
We expect public infrastructure equities to perform similarly to developed market equities in 2025, propelled by supportive regulations for energy transition and strong demand for power infrastructure to fuel AI. While we believe US REITs should underperform US equities, US private real estate funds raised in 2025 should generate above-average returns, benefiting from distressed deals and solid fundamentals.
Private Infrastructure: Secular Themes Offer Compelling Opportunities
This note provides an update on the current opportunity set in infrastructure investments and highlights some of our preferred areas in the private space, including energy transition and digital infrastructure.
Should Investors Alter Portfolios After US President Trump’s Re-election?
No, not at this time. While the Trump administration’s policies will impact markets, we expect other factors will be larger drivers of long-term investment performance.