Our perspective on the global economy and financial markets, and on the investment themes likely to prove consequential in the months – and years – ahead
Multi-Asset Investment Outlook 2026
Paul Niven
Head of Multi-Asset Solutions (EMEA)
I am delighted to present our Multi-Asset Investment Outlook 2026. This document provides our perspective on the global economy and financial markets, and on the investment themes we believe will prove consequential in the months – and years – ahead. In addition, we have updated our forward-looking capital market assumptions, covering expected returns and volatilities for 22 asset classes.
So far, 2025 has seen a number of significant developments, with the unpredictable and inconsistent policies of US president Donald Trump, along with military action in the Middle East, causing substantial volatility in financial markets. Despite this, economic fundamentals remain reasonably strong, with greater – albeit incomplete – clarity around tariff policy and related impacts. Although US inflation is expected to remain above target, Federal Reserve (Fed) rates are expected to be cut by up to 1% by the end of 2026, while the European Central Bank (ECB) has scope for another cut in interest rates.
Investment themes
The US
- The potential end of US ‘exceptionalism’.
- The US dollar has seen pronounced weakness, with scope for further downside, and the share of highly concentrated US equities in global market indices is at record highs.
- We expect a broadening in market returns but are mindful of the strong competitive positions of leading US companies in high growth industries.
Europe
- European equities have seen a good start to the year.
- The removal of Germany’s ‘debt brake’, along with plans to increase fiscal expenditure on defence and infrastructure, may see a better growth backdrop for the eurozone.
- However, rising debt burden may cause challenges for the bond market.
AI
- Industries are set to be transformed by AI, potentially enhancing productivity and gains to capital, and raising overall economic growth rates.
- The technology presents tremendous challenges to policymakers, businesses and individuals, but should also drive meaningful improvements in productivity – faster than has been the case historically.
The outlook, as always, is uncertain and valuations in equity markets and credit spreads are high relative to history. While mindful of the risks, we are excited by the opportunities for investors. We remain resolutely focused on helping our clients navigate both the risks and opportunities that will present themselves over the coming years and trust that you find our insights helpful and instructive in your strategic deliberations.
Interested in learning more?
Download the full 2026 Investment Outlook for an economic roundup from our senior economist, Anthony Willis, and a financial markets and capital market assumptions breakdown from investment strategist Jitzes Noorman.
