As the world enters a new year, the global economy is showing signs of growth and stability. Global activity indicators are in the expansion zone, with the recovery in industry gradually being confirmed and services driving growth in both developed and emerging countries. Inflation seems contained and close to central bank targets, with the ECB potentially having finished its rate-cutting cycle and the Fed continuing its supportive monetary policy in the coming months.
## Expert Insights
Benjamin Hamidi, a senior portfolio manager at ABN AMRO Investment Solutions, believes that the balanced asset allocation is unchanged, with an overall stable preference for equities. Exposure to emerging markets via debt and equity markets is also favored. Luca Dal Mas, a senior fund analyst at Aviva Investors, notes that global equity markets closed December on a strong footing, despite mid-month volatility. US Equities were supported by easing inflation and the Fed’s 25 basis point rate cut, while European and Japanese indices hit record highs.
## Market Trends
Jorge Velasco, Director of Investment Strategy at CaixaBank Private Banking, emphasizes the importance of maintaining consistent risk levels and preserving established geographic and sector allocations. Adam Norris, a portfolio manager at Columbia Threadneedle Investments, is positive on risk assets, such as equities and high yield credit. Silvia Tenconi, Multimanager Investments & Unit Linked at Eurizon Capital SGR, notes that the performance of the portfolio was slightly positive in December, with US equity funds suffering from the weakness of the US dollar.
## Investment Strategy
Richard Troue, Fund Manager at Hargreaves Lansdown Fund Managers, believes that there’s almost universal agreement among investment commentators and investment banks that equities and risk assets can power higher. Antti Saari, Chief Investment Strategist at Nordea investments, maintains an overweight in equities and underweight in fixed income. Didier Chan-Voc-Chun, Head of Multi-Management and Fund Research at Union Bancaire Privée (UBP), notes that the Fed rate cut sparked a rotation out of AI stocks into cyclical sectors like financials, materials, and industrials.
In conclusion, the global economy is expected to continue its growth trajectory in 2026, driven by a combination of factors, including a stable inflation rate, supportive monetary policy, and a strong preference for equities. While there are risks and challenges associated with this growth, experts agree that the current market trends and investment strategies are well-positioned to navigate these challenges and capitalize on the opportunities presented.
