A global fund manager has identified a number of key investment themes of which individuals should be aware in the new year.
Wealth manager Nuveen has firstly dispelled any fears the recent surge in US equity markets driven by the artificial intelligence (AI) sector, has created a bubble that would prompt reducing portfolio allocations to the region.
“We think US large caps still have room to run. US mega cap tech companies may have less-than-clear monetisation timelines around some aspects of AI profitability, but we think investors will continue to reward AI-related capital expenditure spending, which shows no sign of slowing down in the US,” Naveen chief investment officer Saira Malik noted.
Further she recognised the conditions in the US for asset classes other than equities also remains strong.
“Beyond equities, we think stronger relative economic growth, favourable tax and regulatory policies and a diversified economy offer compelling US opportunities across such areas as private credit, private asset-backed finance and private investment grade bonds,” she said.
Private credit and equity were other asset classes she suggested should play a larger role in investment portfolios in 2026 as the manager is wary about duration risk and credit spread tightening.
“We think many, if not most, investors are underweight private markets and could benefit from taking on liquidity risk to seek enhanced returns, income and diversification,” she pointed out.
“As such, we encourage investors to seek out alternative credit sectors beyond traditional fixed income benchmarks, including senior loans, collateralized loan obligations, public and private securitized assets, real estate and infrastructure debt and Commercial Property Assessed Clean Energy financing.”
“Private equity also shows promise. Lower interest rates should spur merger and acquisition activity, and tougher fundraising means experienced managers are deploying capital. We favour senior over junior capital and prefer secondary markets with single-manager structures,” she added.
Property is another asset class that will offer good investment opportunities in the new calendar year, according to Malik.
“After years of falling values, oversupply and weak demand, 2025 saw values rebound and supply contract. We expect demand should follow,” she predicted.
“For now, real estate markets are being driven by rising income returns. Capital appreciation hasn’t materialised yet, but we expect that will rise as well, providing another tailwind. The office sector remains under pressure, but medical office, grocery-anchored retail and affordable housing offer notable opportunities.”