Edmond de Rothschild unveils its market outlook and convictions for 2026
28 JAN, 2026
By Joanna Piwko from RankiaPro Europe
Edmond de Rothschild unveils its outlook and convictions for 2026, which remain encouraging despite a slight slowdown in global growth. The year ahead is set to be another pivotal test of market resilience, requiring investors to remain vigilant amid shifting economic, political and geopolitical trends.
- Equities: Growth opportunities in selected sectors, with lower volatility and less concentration.
- Bonds: A key pillar in building robust and diversified portfolios, despite a favourable 2025 and low risk premiums.
- Commodities: Particular focus on gold, supported by solid fundamentals and its role as a diversification and safe-haven asset.
- Private markets: After the pressures of 2025, 2026 should be a transition year, with long-term return prospects remaining attractive.
Equity markets in 2026: more diversified and less volatile growth opportunities
Following a strong performance in 2025, equity markets entered the year with returns highly concentrated in a small number of large-cap stocks, particularly in the United States and linked to artificial intelligence. While the US market remains supported by AI-related investment, such concentration has historically tended to fade over time.
In Europe, the search for new growth catalysts continues. A weaker euro, the German infrastructure plan and a potential recovery in corporate earnings could help restore investor confidence, despite ongoing political uncertainty. Financials and industrials are expected to be among the key beneficiaries. Emerging markets, including China, remain attractively valued, with stimulus measures and easing deflationary pressures acting as potential catalysts.
Political, geopolitical and trade-related uncertainties are likely to persist in 2026, creating periods of volatility but also opportunities for long-term investors. Broad sector and geographical diversification will remain essential.
Bonds in a new environment
Government bond yield curves are expected to remain elevated in 2026, driven primarily by stretched public finances and significant funding needs, particularly in the United States and Europe. In this context, government bonds may offer less protection within balanced portfolios.
Despite tight spreads and isolated defaults, credit risk remains moderate. Increased differentiation between issuers supports continued exposure to corporate bonds, which remain a key component of diversified portfolios. Investment linked to AI is also becoming a structural driver of corporate bond issuance, alongside merger and acquisition activity.
Commodities: gold as a key diversifier
Gold continues to play an essential role as a diversification asset in an uncertain geopolitical environment. Supported by central bank demand and long-term fundamentals, gold remains a key component of portfolio construction despite recent volatility driven by short-term flows.
Private markets: 2026, a transition year
After several years of adjustment, private markets are entering a transition phase. Underlying performance remains solid and valuations appear more reasonable. Over the longer term, private markets are becoming an increasingly important source of diversification and returns as listed markets grow more concentrated.
Overall, Edmond de Rothschild expects diversification across asset classes to be a key driver of portfolio resilience in 2026, with bonds, precious metals and private markets playing an important role alongside listed equities.
