As we enter 2026, we remain cautiously optimistic while mindful of the risks ahead. Many of last year’s key themes are expected to persist and continue shaping investor behavior. In this environment, we believe our emphasis on global diversification positions our portfolios well to navigate evolving market dynamics effectively. We will maintain a balanced approach — combining exposure to high‑quality growth companies with opportunities across sectors, regions and capitalizations. Income‑generating assets will continue to play an important role in providing stability and downside protection.
Macroeconomic themes
Economic growth: moderating but positive
The fundamentals of the economy remain healthy as evidenced by continued consumer spending, resilient labor market and healthy corporate balance sheets.
Monetary policy: steady
Watching for the potential impacts a new Federal Reserve Chairman will have on policy and setting interest rate expectations. We anticipate the Fed will remain data dependent. They will continue to balance their dual mandate for stable prices and maximum employment, which has been challenging given their divergence in direction. The Fed’s rate cutting path is unpredictable, but the bias remains towards lower rates.
Fiscal landscape: stable but watchful
Governments are expected to maintain targeted spending on infrastructure, innovation and energy transition initiatives. Many municipalities remain on solid footing, still benefiting from COVID era funding support. While rising public debt remains a concern, it is unlikely to disrupt markets in the near term.
Geopolitics: persistent risk
Challenges persist amid ongoing uncertainty, as conflicts continue to evolve — escalating in some cases while easing in others — and new tensions emerge.
Investment themes
International equities
After significantly outperforming U.S. equities last year, we believe international stocks continue to represent a compelling opportunity for investors. These markets offer a more value‑oriented opportunity set, supported by attractive relative valuations. In addition, international equities are well positioned to benefit from a weaker U.S. dollar and continued accommodative monetary policy.
