💡 As global stock markets reach new heights, gold shines even brighter as a safe-haven asset. With the new year ahead, investors are presented with a unique opportunity to rethink their asset allocation beyond just stocks and bonds.

• 🧈 Overweight Gold: Escalating geopolitical tensions have propelled gold, a safe-haven asset, to record highs. Meanwhile, benefitting from an ongoing Emerging Market central bank demand, gold price may test USD4,800 this year.
• 📊 The Need of Diversification: Stock-bond correlations remain elevated near a half-century high. This suggests that a traditional 60:40 equity-bond portfolio may be less effective at managing volatility than in the past, prompting investors to increase their allocation to non-traditional asset classes.
• 📌 Alternative Strategies: Investments in private equity, private credit and debt, infrastructure, and hedge fund strategies present a compelling case for diversification. Institutional investors and sovereign wealth funds aggressively allocate capital to the alternatives space, which supports both valuations and deal flow.

💡 Will the US Federal Reserve continue to cut rates in 2026? How can we strategically plan to secure attractive yields in advance?

• ✂️ Fed Rate Cut Expectation: We expect the Fed to cut rates by another 75bps by end-2026 to support jobs as the inflation impact of tariffs appears limited.
• 🎢 Rising Bond Volatility: Uncertainty related to the US fiscal burden and Fed independence after a new Chair takes office risk bond volatility. However, we would use any resulting yield rebound to lock in higher absolute yields to hedge against the risk of ever-lower cash yields. We see US 10-year government bond yields above 4.25% as attractive since we expect it to ease to the 3.75%- 4.00% range over the next 6-12 months.
• 💰 Prefer Emerging Market Bonds: EM bonds offer attractive yields when compared to DM bonds. Most EM economies have bolstered their fiscal and current accounts in recent years. Benign EM inflation, dovish monetary policy settings and a weak USD are also key drivers.

Stay tuned to the next video episode on Alternatives.

💡 Will global stocks soar to new heights this year? How can we navigate unexpected shifts while seizing opportunities?

• 🎯 Overweight global equities, with a preference for US and Asia ex-Japan (AxJ) equities: US equity resilience continues to drive global equity performance, supported by a robust fundamental backdrop, including strong earnings growth, receding geopolitical risks and an accommodative Fed policy, which bolster the case for a soft landing in the US economy.
• 🤖 Tech Companies Continue To Invest: The investment scale of major hyperscalers is projected to surge significantly, reaching approximately USD 500 billion by 2026. Hyperscalers are experiencing AI revenue growth that outpaces capex, supported by ample free cash flow. This shows that the tech sector is not a bubble yet.
• 🌏 Asian Stocks Opportunities: We project Asia ex-Japan (AxJ) equities to deliver the highest earnings growth among major regions over the next 12 months. We expect Chinese equities to outperform within AxJ. Chinese equities stand to benefit from enhanced corporate governance and targeted policy support for technology and innovation.
• 🕌 Upgrade Indian equities to Overweight: We also add India large and mid-caps as opportunistic ideas, on the back of a recovery in earnings, strong structural growth and less-demanding valuations vs. a year ago spurring foreign investor interest.

Stay tuned to the next video episode on Fixed Income.