Daniel Schoeman

Our 2026 positioning will need to balance a combination of risks and opportunities. On the risk side, we remain vigilant about the prospect of persistent inflation, which could place renewed upward pressure on long-term yields. Geopolitical uncertainty and US political risks associated with potential policy shifts under a Trump administration also warrant caution. In addition, the pronounced concentration of US equities in a handful of mega-cap names heightens vulnerability should investor sentiment change.  Finally, the Federal Reserve faces mounting pressure to ease policy, and any unexpected developments in growth or inflation could lead to market volatility.

These risks are counterbalanced by constructive factors, including valuations outside the US appearing to offer more value, global earnings expectations continuing to trend positively, and monetary policy remaining broadly accommodative across major economies.

In this environment, we believe the most prudent course is to maintain a well-diversified multi-asset portfolio that preserves flexibility and optionality. Should the US equity market experience a derating in the short term, we would view it as an opportunity to add to risk assets across portfolios. More broadly, successful navigation of 2026 will require a heightened degree of tactical responsiveness.

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