Press release
Northern Trust 2026 Global Investment Outlook: Continued Economic Resilience, with Increasing Market Risks
Diverging Performance Within Asset Classes Bolsters Case for Active Management CHICAGO & LONDON--(BUSINESS WIRE)-- Northern Trust Asset Management, a leading
About this update from Northern Trust Corporation
[{"type":"text","content":"\nDiverging Performance Within Asset Classes Bolsters Case for Active Management\n\n\n CHICAGO & LONDON--(BUSINESS WIRE)--\nNorthern Trust Asset Management, a leading global investment management firm with $1.4 trillion in assets under management as of September 30, 2025, expects the global economy in 2026 to continue to grow by maintaining momentum and avoiding recession, despite ongoing risks. Equities will be supported by strong fundamentals, fixed income investors must contend with a new inflation regime, and alternatives will prove central to multi-asset portfolio construction.\n\n\nGlobal Co-Chief Investment Officer Anwiti Bahuguna, Ph.D. said, “In 2026, we largely prefer equities over bonds. However, structural divergence within the asset class provides a clear mandate for active management. Depending solely on momentum from the broad equity rally likely will prove costly, and security selection must be a core part of the investor’s toolkit.”\n\n\nGlobal Co-Chief Investment Officer Chris Roth, CFA said, “While we expect inflation to remain contained at its above-average rate of about 3%, investors must closely monitor the tail risks of inflation reigniting. The Federal Reserve’s balancing act between fighting inflation and supporting the labor market risks inflation levels staying above target. Tariffs and tighter immigration policies may put pressure on prices through goods and wages.”\n\n\nNorthern Trust Asset Management’s full 2026 Global Investment Outlook can be found here.\n\n\nAsset class highlights include:\n\n\n\nU.S. Equities: Strong fundamentals support equities, but stretched valuations and narrow leadership, especially among AI-linked mega-caps, signal a need for greater selectivity. The era of passive beta is giving way to one where quality, value and low-volatility factors can help advisors position client portfolios for resilience and long-term success.\n\n\n\nTreasury Inflation-Protected Securities (TIPS): Inflation is expected to remain above average at about 3%, with tail risks of it running hotter than market expectations. TIPS offer a compelling hedge, especially as breakeven rates lag behind current inflation trends.\n\n\n\nGlobal Bonds: Relying solely on U.S. Treasurys for portfolio diversification is a relic of the past decade. Global government bonds can provide diversification and a currency tail...