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Nanette Abuhoff Jacobson, Managing Director and Multi-Asset Strategist at Wellington Management and Global Investment Strategist for Hartford Funds
Supriya Menon, Managing Director and Multi-Asset Strategist – EMEA at Wellington Management
Supportive policies, earnings growth, and shifting global dynamics set the stage for both opportunity and volatility across markets in the year ahead.
In a feat not seen since 2019, global equities, bonds, and commodities all delivered positive returns in 2025,1 thanks to waning tariff concerns, central-bank easing, AI-driven growth, and the many splendors of gold. So, can the good times keep rolling in 2026, amid questions about valuations, an AI bubble, US-China relations, and other risks? We think four factors could drive positive results on balance but may cause choppiness along the way
John Butler, Head of Emerging-Market Equities at Wellington Management
Eoin O’Callaghan, European Macro Strategist at Wellington Management
Positioning for growth as global markets adapt to fiscal tailwinds, innovation, and easing uncertainty.
From a macro perspective, what matters for asset prices is, first, the interaction between activity and inflation, and second, the associated policy response. That sounds simple in theory and was for a long time in practice because globalization fostered a low-inflation, low-rate environment with extended growth cycles. However, in today’s new economic regime, this interaction has become more complex.
Johanna Kyrklund, Group Chief Investment Officer at Schroders
The economic backdrop is still conducive to returns, but diversification will be essential for building resilient portfolios.
As we head into 2026, there’s a lot of concern about equity-market valuations. Comparisons are being drawn with the dot-com bubble of 1999-2000 due to significant investments being made by the hyperscalers into data centers and cloud infrastructure. At the same time, many AI start-ups are losing money, with their valuations being boosted by vendor financing. Against this backdrop, we’ve heard talk about canaries in coal mines, cockroaches (i.e., where one emerges there are usually many), and staying at the party for one last dance.
Andrew Heiskell, Equity Strategist at Wellington Management
Nicolas Wylenzek, Macro Strategist at Wellington Management
As global markets adapt to shifting leadership, AI-driven innovation, and new economic regimes, investors face a wider array of opportunities and risks.
The global economy and markets navigated a challenging backdrop in 2025, marked by rising trade tensions and tariffs, ongoing conflicts in Europe and the Middle East, and persistent weakness in China. Yet, despite these headwinds, global growth proved resilient, and inflation remained relatively contained. Corporate earnings surpassed expectations—most notably in the US—with strength also broadening to Japan and select emerging markets.
Alex Tedder, CIO Equities at Schroders
Tom Wilson, Head of Emerging Market Equities at Schroders
Alex Tedder examines reasons for optimism, even amid elevated valuations, while Tom Wilson explores the factors that could sustain emerging-market equity performance in 2026.
Investors in developed markets still face high valuations, policy uncertainty, and concentrated sector leadership, but we think supportive elements such as resilient earnings and advancements in AI could offer meaningful upside. Meanwhile, in emerging markets, valuations remain reasonable, we expect earnings momentum to persist, and a resumption of US dollar depreciation could be a tailwind. As always, understanding the unique drivers and risks present in specific markets and sectors and with individual companies remains essential for navigating the global-equities landscape.
Nils Rode, Chief Investment Officer at Schroders Capital
Amid continued macroeconomic and geopolitical volatility, we believe private markets could benefit from both cyclical and structural tailwinds that allow them to play a key role in diversified, resilient portfolios.
Resilience has become the key watch word for investors in an era shaped by persistent uncertainty. In fact, in Schroders’ Global Investor Insights Survey for 2025, published in June, portfolio resilience was selected as investors’ highest priority, by far, for the remainder of 2025 and into 2026. The surface calm of markets today—reflected in strong public-equity market performance and benign bond yields—masks a complex backdrop. Inflation remains sticky, fiscal pressures are building, and geopolitical flashpoints continue to test global stability. Even the enthusiasm around artificial intelligence, while transformative, risks fueling new valuation imbalances.
Periods such as this challenge investors to look beyond short-term momentum and focus instead on the durability of returns—and on bottom-up value creation. In this context, private markets can be seen as a key area in which cyclical and structural forces are aligning to create opportunity.
Amar Reganti, Managing Director at Wellington Management LLP and Fixed-Income Strategist for Hartford Funds
Marco Giordano, Investment Director at Wellington Management
We expect global yields to edge higher in 2026 as nimble investors weigh opportunities and risks.
Our expectation going into 2025 was that bond yields would stay higher for longer, central banks would look to cut policy rates, and governments would pursue increasingly activist fiscal policies. While these themes played out, we’ve also witnessed remarkable stability in bond markets. Except for the short-lived period of acute market stress following President Donald Trump’s “Liberation Day” tariff announcement, bond investors have, to date, been relatively sanguine.
Julien Houdain, Head of Global Unconstrained Fixed Income at Schroders
Lisa Hornby, Head of US Fixed Income at Schroders
Abdallah Guezour, Head of Emerging-Market Debt and Commodities at Schroders
Experts from Schroders examine central-bank policy divergence, inflation risks, valuation dynamics, and emerging opportunities across global fixed-income markets.
As global fixed-income investors look toward 2026, the landscape is shaped by cycles that are increasingly out-of-sync across major economies, with the trajectories for inflation, monetary policy, and economic growth diverging across regions. The leaders of our fixed-income teams share their views on how these markets can be navigated in the new year.
-
Global Macro
Nanette Abuhoff Jacobson, Managing Director and Multi-Asset Strategist at Wellington Management and Global Investment Strategist for Hartford Funds
Supriya Menon, Managing Director and Multi-Asset Strategist – EMEA at Wellington ManagementSupportive policies, earnings growth, and shifting global dynamics set the stage for both opportunity and volatility across markets in the year ahead.
In a feat not seen since 2019, global equities, bonds, and commodities all delivered positive returns in 2025,1 thanks to waning tariff concerns, central-bank easing, AI-driven growth, and the many splendors of gold. So, can the good times keep rolling in 2026, amid questions about valuations, an AI bubble, US-China relations, and other risks? We think four factors could drive positive results on balance but may cause choppiness along the way
John Butler, Head of Emerging-Market Equities at Wellington Management
Eoin O’Callaghan, European Macro Strategist at Wellington ManagementPositioning for growth as global markets adapt to fiscal tailwinds, innovation, and easing uncertainty.
From a macro perspective, what matters for asset prices is, first, the interaction between activity and inflation, and second, the associated policy response. That sounds simple in theory and was for a long time in practice because globalization fostered a low-inflation, low-rate environment with extended growth cycles. However, in today’s new economic regime, this interaction has become more complex.
Johanna Kyrklund, Group Chief Investment Officer at Schroders
The economic backdrop is still conducive to returns, but diversification will be essential for building resilient portfolios.
As we head into 2026, there’s a lot of concern about equity-market valuations. Comparisons are being drawn with the dot-com bubble of 1999-2000 due to significant investments being made by the hyperscalers into data centers and cloud infrastructure. At the same time, many AI start-ups are losing money, with their valuations being boosted by vendor financing. Against this backdrop, we’ve heard talk about canaries in coal mines, cockroaches (i.e., where one emerges there are usually many), and staying at the party for one last dance.
-
Equities
Andrew Heiskell, Equity Strategist at Wellington Management
Nicolas Wylenzek, Macro Strategist at Wellington ManagementAs global markets adapt to shifting leadership, AI-driven innovation, and new economic regimes, investors face a wider array of opportunities and risks.
The global economy and markets navigated a challenging backdrop in 2025, marked by rising trade tensions and tariffs, ongoing conflicts in Europe and the Middle East, and persistent weakness in China. Yet, despite these headwinds, global growth proved resilient, and inflation remained relatively contained. Corporate earnings surpassed expectations—most notably in the US—with strength also broadening to Japan and select emerging markets.
Alex Tedder, CIO Equities at Schroders
Tom Wilson, Head of Emerging Market Equities at SchrodersAlex Tedder examines reasons for optimism, even amid elevated valuations, while Tom Wilson explores the factors that could sustain emerging-market equity performance in 2026.
Investors in developed markets still face high valuations, policy uncertainty, and concentrated sector leadership, but we think supportive elements such as resilient earnings and advancements in AI could offer meaningful upside. Meanwhile, in emerging markets, valuations remain reasonable, we expect earnings momentum to persist, and a resumption of US dollar depreciation could be a tailwind. As always, understanding the unique drivers and risks present in specific markets and sectors and with individual companies remains essential for navigating the global-equities landscape.
Nils Rode, Chief Investment Officer at Schroders Capital
Amid continued macroeconomic and geopolitical volatility, we believe private markets could benefit from both cyclical and structural tailwinds that allow them to play a key role in diversified, resilient portfolios.
Resilience has become the key watch word for investors in an era shaped by persistent uncertainty. In fact, in Schroders’ Global Investor Insights Survey for 2025, published in June, portfolio resilience was selected as investors’ highest priority, by far, for the remainder of 2025 and into 2026. The surface calm of markets today—reflected in strong public-equity market performance and benign bond yields—masks a complex backdrop. Inflation remains sticky, fiscal pressures are building, and geopolitical flashpoints continue to test global stability. Even the enthusiasm around artificial intelligence, while transformative, risks fueling new valuation imbalances.
Periods such as this challenge investors to look beyond short-term momentum and focus instead on the durability of returns—and on bottom-up value creation. In this context, private markets can be seen as a key area in which cyclical and structural forces are aligning to create opportunity.
-
Fixed Income
Amar Reganti, Managing Director at Wellington Management LLP and Fixed-Income Strategist for Hartford Funds
Marco Giordano, Investment Director at Wellington ManagementWe expect global yields to edge higher in 2026 as nimble investors weigh opportunities and risks.
Our expectation going into 2025 was that bond yields would stay higher for longer, central banks would look to cut policy rates, and governments would pursue increasingly activist fiscal policies. While these themes played out, we’ve also witnessed remarkable stability in bond markets. Except for the short-lived period of acute market stress following President Donald Trump’s “Liberation Day” tariff announcement, bond investors have, to date, been relatively sanguine.
Julien Houdain, Head of Global Unconstrained Fixed Income at Schroders
Lisa Hornby, Head of US Fixed Income at SchrodersAbdallah Guezour, Head of Emerging-Market Debt and Commodities at Schroders
Experts from Schroders examine central-bank policy divergence, inflation risks, valuation dynamics, and emerging opportunities across global fixed-income markets.
As global fixed-income investors look toward 2026, the landscape is shaped by cycles that are increasingly out-of-sync across major economies, with the trajectories for inflation, monetary policy, and economic growth diverging across regions. The leaders of our fixed-income teams share their views on how these markets can be navigated in the new year.
Download the PDF to read all of our 2026 outlooks.
1 As of 11/30/25. Equities are represented by the MSCI ACWI Total Return Index, which is a free float-adjusted market capitalization index that measures equity market performance across global developed and emerging markets (net of dividend withholding tax), returned 21.07%. Bonds are represented by the Bloomberg Global Aggregate Total Return Index, which provides a broad-based measure of global investment-grade fixed-rate debt markets, returned 16.15%. Commodities are represented by the Bloomberg Total Return Commodity Index, which measures the performance of a broad group of commodity futures such as energy, metals, and agriculture, returned 7.89%. Data Source: Refinitiv.
Important Risks: Investing involves risk, including the possible loss of principal. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political, economic, and regulatory developments. These risks may be greater, and include additional risks for investments in emerging markets. • Private equity investments involve a high degree of business and financial risk that can result in substantial losses. The valuation of private-equity investments is complex and is typically based on fair value. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. • Diversification does not ensure a profit or protect against a loss in a declining market.
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