Investment managers published outlooks for 2026 this week, highlighting a neutral stance on equities, and promoting the case for gold, renewables amidst the Middle East conflict.

Nuveen, a $1.4 trillion global asset manager, has published its 2026 investment outlook for the second quarter, maintaining a neutral stance for equities a and constructive stance on global bond markets, renewables.

Nuveen thinks that the expansion across major economies shows little sign of slowing. The positive outlook also extends beyond the US. Increased government spending supports its forecast for a pickup in European growth this year, with the UK, Japan, and China also contributing positively. “Overall, global recession risks have receded, and the growth outlook has brightened,” Nuveen said in a note.

Nuveen believes that investors should focus on high-quality stocks and selection rather than the macroeconomic backdrop. It thinks that the artificial intelligence boom is still powerful with long-term tailwinds, but increased scrutiny of megacap tech companies should help drive broader market leadership. It thinks value and cyclical strategies are positioned to benefit most from this trend.

Nuveen favours US large cap stocks over small caps and other developed markets, supported by a dovish US Federal Reserve and growth-friendly tax and regulatory policy. While emerging markets have rallied recently, it remains cautious given trade policy and geopolitical vulnerabilities.

German asset manager DWS also sees greater upside than downside potential in US equities. It highlighted that European equities have suffered as a result of the Iran conflict, much like the German stock market, which had previously been seen as a key driver for Europe this year. “Uncertainty remains elevated, but Europe continues to play an important role in a broadly diversified, balanced equity portfolio,” DWS said in a note.

DWS also noted that Korea and Taiwan have benefited from strong earnings momentum in their technology sectors, while growth in other regions has been significantly weaker. Indian equities remain very highly valued, which is likely to limit upside potential, DWS continued. Risks stem in particular from geopolitical tensions, such as those between the US and China over Taiwan. A stronger US dollar and additional tariffs could also weigh on markets. Other wealth managers, such as Edmund Shing at BNP Paribas Wealth Management and M&G Investments and Lombard Odier favour emerging markets.

Fixed income
Nuveen remains constructive on global bond markets. Despite tight credit spreads in some areas, yields are attractive, fundamentals strong and investor demand high. It thinks that it makes sense for investors to exercise broad diversification and take advantage of the nimbleness and flexibility offered by active management.

Nuveen expects long-term rates to remain range-bound even as short-term rates decline. It advocates maintaining neutral duration and focusing on credit opportunities. Investment grade credit faces potential headwinds from tight credit spreads and extended duration.

Municipal bonds rank among Nuveen’s top preferences. Strong fundamentals support improving prices and attractive relative value. The upward-sloping municipal yield curve offers compelling yields for those who are seeking to extend duration.

In DWS' view, market-implied inflation expectations are too high. As a result, yields on US Treasuries are likely to edge lower, with bond prices moving higher. It believes that emerging market sovereign bonds are still attractive. “Selected bonds from emerging markets remain appealing. Potential total returns of around 10 per cent represent a reasonable compensation for the higher risk involved,” DWS said.

Real estate
Nuveen is bullish on private real estate’s ongoing recovery. Price returns are strengthening across geographies and property types, driven initially by rising income returns and reduced supply. It anticipates capital appreciation gains as well over the coming quarters.

Among sectors, Nuveen’s favoured areas include light industrial, convenience-oriented retail, healthcare and global housing. Light industrial features low vacancy rates and limited new supply given the difficulties associated with industrial zoning.

Real estate debt remains attractive with wide spread premiums, though it increasingly favours equity as the recovery broadens. Public REITs have rallied, with net asset values now near fair value. Nuveen thinks this is a stock-pickers’ market and its focus is on senior housing, healthcare, data centres and manufactured housing/RV resorts providing affordable housing options.

Infrastructure and real assets
Nuveen believes that public infrastructure looks compelling with attractive valuations, durable cash flows and the essential service/defensive characteristics of the underlying businesses. It is focused on regions experiencing the highest power demand growth while avoiding jurisdictions experiencing regulatory scrutiny.

On the private markets side, infrastructure opportunities span equity and debt, particularly assets benefiting from surging power demand and cloud computing expansion. Nuveen favours efficient energy infrastructure over legacy assets, emphasising data centres and sustainability-focused investments supporting environmental transitions.

Farmland remains a long-term allocation for Nuveen for differentiated returns potential and inflation hedging characteristics. However, row crop margins continue moderating, particularly in the US.

Meanwhile, DWS views the recent price declines in gold more as an opportunity to enter than as a signal to exit over the medium to long term. Demand from central banks is likely to remain strong, as many are seeking to partially replace their dollar reserves with gold. DWS prefers gold over silver.

Against the backdrop of the largest oil shock in the Middle East conflict, Laura Cooper, global investment strategist and head of macro credit at Nuveen, believes that renewables demand is rising, economics are compelling, and supply remains constrained. “The current renewables opportunity has little to do with climate policy. It’s about economics: renewable energy has become the lowest cost power available and offers contracted, long-term cash flows,” she said.

This has been echoed by other wealth managers, for example Edmund Shing at BNP Paribas Wealth Management who said that the increased need for energy security has accelerated the energy transition. He is also still positive on the outlook for gold.