2026 Outlook: Above and Below the Radar — Five Themes for 2026
By: Saira Malik, Anders Persson, and Jessica Bailey, Nuveen
Our 2026 Outlook explores crosscurrents, risks, and opportunities as investors enter 2026. We suggest opportunities across well-established themes to capitalize on potential market turnarounds and explore lesser-known corners of the global markets for greater diversification, by highlighting best ideas from two asset classes.
Investors enter 2026 facing crosscurrents, risks, but also opportunities. Global growth remains solid despite emerging cracks. Inflation appears to be moderating, but not fast enough for many central banks. Geopolitical tensions and deglobalization fuel uncertainty, yet global financial market returns have remained quite strong.
So, what does this mean for portfolio positioning in the new year and beyond? We suggest pursuing opportunities that are both above and below the radar: continuing well-established themes, capitalizing on potential market turnarounds, and exploring lesser-known corners of global markets for greater diversification.
Fixed Income: Best Ideas
- Securitized assets (especially commercial mortgage-backed securities) offer strong fundamentals and attractive valuations.
- Senior loans provide a compelling combination of attractive yields and value.
- For municipal bonds, we favor select opportunities in health care and higher education and believe the 7-to-11 year duration range offers value.
Investment Positioning
We maintain a broadly positive outlook toward global bond markets. While credit spreads have tightened in some areas, current yields remain attractive, credit fundamentals are strong, and investor demand for fixed income assets remains elevated. We encourage investors to capitalize on volatility from policy shifts and economic deceleration through broad diversification and active management.
U.S. Treasuries offer poor value at this point. We expect long-term rates to remain range-bound even as short-term rates decline. If the Fed cuts less aggressively than markets expect, Treasuries could face trouble. We advocate maintaining neutral duration while identifying attractive credit opportunities. However, we expect duration to reassume its role as a growth hedge in coming quarters.
Investment grade credit faces potential headwinds from extremely tight credit spreads and extended duration profiles. In contrast, several alternative credit segments, including senior loans, CLOs and securitized assets remain attractive given relatively high yields. According to our upcoming EQuilibrium global institutional investor survey, almost 40% of U.S. pensions agreed that diversifying their alternative credit portfolio was a top priority over the next five years.
Emerging markets debt has performed strongly, with continued tailwinds, especially for corporate markets. High yield and preferred securities feature solid fundamentals with favorable long-term prospects.
Municipal bonds remain among our most-preferred segments, and prices have been improving, reflecting strong fundamentals. We think municipal markets continue to offer strong relative value. The upward sloping nature of the municipal yield curve remains attractive and offers compelling yields for those looking to extend duration.
We are closely monitoring private credit markets for signs of stress but continue to see opportunities. Recent negative headlines and isolated credit events reinforce the importance of selectivity, strong deal structures and robust covenants.
Infrastructure and Real Assets: Best Ideas
- In public markets, we favor electric utilities trading at a discount while delivering accelerating earnings growth.
- In private markets, we focus on investments aligned with climate and digital transformations – such as clean energy generation, energy storage and data centers.
Investment Positioning
Infrastructure investments — both public and private, as well as equity and debt — remain a focus for Nuveen’s Global Investment Committee. Surging energy demand, strong fundamentals, resiliency, and inflation-hedging potential combine to create a compelling case for infrastructure.
We are particularly bullish on public infrastructure due to relative valuation and essential service/defensive characteristics. The best opportunities are in new data center buildouts, gas-powered generation, and utilities positioned to capitalize on strong secular growth trends. We focus on regions with the highest power demand growth while avoiding those facing regulatory scrutiny.
In private markets, we continue identifying diverse infrastructure opportunities across equity and debt, chiefly those benefitting from surging power demand and expanding cloud computing needs. We focus on modern, efficient energy infrastructure over legacy generation assets, with special attention to data centers, energy storage, and sustainability-focused infrastructure promoting environmental transitions.
Farmland remains a compelling long-term allocation for its differentiated return potential and inflation-hedging characteristics. However, we continue to see price moderation in row crop margins, particularly in the U.S.
About the authors: Saira Malik, CFA, is Head of Nuveen Equities and Fixed Income, Chief Investment Officer (CIO) and a member of the Executive Management Team. She leads a business with more than $1 trillion in assets under management across equities, global fixed income, EIC, municipal bonds, multi-asset strategies, private placements, global product, public real assets and C-PACE lending, along with driving weekly market and investment insights and delivering client asset allocation views from across the firm’s investment teams.
Saira also leads Nuveen’s Global Investment Committee (GIC), bringing together the firm’s most senior investment leaders to deliver actionable portfolio allocation ideas for our clients and authoring a weekly market commentary. Since joining the firm in 2003, Saira has held a variety of positions. Prior to being named CIO, she was head of global equities portfolio management and head of global equities research. Previously, Saira was with JP Morgan Asset Management, where her roles included small cap growth portfolio manager.
Anders Persson, CFA, is Chief Investment Officer, Head of Global Fixed Income, and a member of the Nuveen Senior Leadership Team. He oversees all public and private fixed income activities, including portfolio management, research and trading. Anders is also a member of the Global Investment Committee and chairs the Global Fixed Income Investment Council. Anders serves as a trusted voice on the complexities of fixed income markets and regularly appears in the media and speaks at industry conferences.
Jessica Bailey is Global Head of Infrastructure at Nuveen. In this role, she leads the firm’s global infrastructure platform which has more than $36 billion of assets under management across credit and equity.
Disclosures: This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her financial professionals.
The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature.
Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible.
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