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As 2025 draws to a close, the world’s financial markets remain buoyed by abundant liquidity, falling interest rates, and resilient corporate earnings. BNP Paribas Wealth Management’s latest Investment Strategy Focus outlines the forces shaping global portfolios in 2026 and the most relevant investment strategies for a mature yet still vibrant bull market.
Despite episodes of volatility, macro liquidity from the US and China continues to sustain global risk appetite, allowing investors to position selectively for growth while preserving capital discipline.
1. The macro landscape: five forces reshaping global allocation
The employment paradox
Across developed economies, unemployment sits near historic lows, yet wage growth decelerates under the dual impact of the gig economy and artificial intelligence. This environment favours capital over labour, translating into structurally higher profit margins. For wealth management professionals, it signals a regime where corporate profitability becomes the leading indicator for equity performance.
A global rate retreat
Following the Federal Reserve’s dovish turn, short and long-term yields continue to compress worldwide. Even as sovereign debt piles up, subdued inflation expectations drive real rates lower. The “hunt for yield” has returned, forcing investors to reconsider duration exposure and diversify beyond traditional fixed income.
Liquidity still reigns supreme
Record corporate buybacks, sustained earnings growth and an abundance of cash on balance sheets are propelling equities higher. Retail participation remains elevated while institutional investors cautiously re-enter risk assets. Volatility will persist, yet liquidity remains the market’s dominant force.
The slow erosion of dollar dominanc
After a 12% depreciation in the first half of 2025, the US dollar’s exceptionalism is fading. Narrowing growth differentials, encourage diversification toward non-US currencies and equities, a key pillar in BNP Paribas’ recommended investment strategies for 2026.
The new age of resource scarcity
Years of underinvestment in mining and refining capacity are colliding with surging demand for metals essential to technology, energy transition and defence. The result is a structural bull market in commodities, from copper to aluminium, and the rise of real assets as a strategic hedge against inflation and geopolitical fragmentation.
2. Equities and bonds: two sides of the same momentum
A broad-based equity advance
The MSCI World Index continues to reach new highs, gaining 6% in EUR and 19% in USD year-to-date. What distinguishes this rally is its breadth: large caps, small caps and emerging markets are all contributing to the uptrend. In the US, Q3 earnings surprised positively (+7.3% EPS versus consensus), and full-year 2025 earnings growth is forecast at 11%. In Europe and Japan, forward earnings expectations keep rising, validating the constructive stance on equities
Bond markets benefit from yield compression
Sovereign and corporate bonds have delivered solid returns in 2025 (+8% US Treasuries, +5% Eurozone, +6% UK). Disinflation and declining term premia drove yields lower, lifting capital values. Yet, with core inflation near 2.4% in Europe and 3.2% in the US, BNP Paribas recommends an opportunistic approach, as long-term returns are likely capped at today’s low yields.
3. Private credit: contained cracks, selective opportunities
Recent bankruptcies among US auto-parts suppliers (Tricolor, First Brands) have sparked questions about private-credit risk. The market has ballooned to over USD 2 trillion since 2020, and investor anxiety over weaker covenants is justified.
BNP Paribas’ view: this is not systemic stress, at least not yet. Monitoring indicators such as high-yield spreads, regional-bank ETFs and leveraged-loan indices shows no contagion. However, selectivity is vital. Investors should favour European funds where credit covenants remain robust, a prudent application of disciplined alternative investment management.
4. Japan’s “Sanaenomics”: conservative reform meets fiscal stimulus
A Japanese paradox
The appointment of Sanae Takaichi as Japan’s first female Prime Minister has introduced what analysts call “Sanaenomics”, a blend of traditional fiscal expansion and corporate-governance reform. While her conservative stance tempers expectations on social change, fiscal support including tax cuts and higher disposable income thresholds should stimulate consumption.
Two policy “arrows” underpin the Japanese equity case:
- Accelerating earnings growth through pro-business reforms
- Enhanced corporate governance increasing ROE and lowering capital costs.
Together, they justify a constructive allocation to Japanese equities within diversified portfolios.
5. Tactical adjustments: from precious metals to alternatives
After a spectacular rally (gold +53%, silver +60–70%), precious metals have entered a consolidation phase. BNP Paribas downgrades the sector from Positive to Neutral, with 12-month targets at USD 4,400/oz for gold and USD 55 for silver. Short-term corrections are likely, yet long-term fundamentals remain favourable. Limited supply, sustained central-bank demand and geopolitical uncertainty will keep the asset class strategically relevant.
This recalibration illustrates the importance of blending tactical flexibility with structural conviction, hallmarks of modern alternative investment management.
6. Preferred investment ideas for 2026
BNP Paribas Wealth Management’s multi-asset stance focuses on diversification and resilience through alternative investment solutions that complement traditional equity-bond portfolios:
Equities: european listed infrastructure (including utilities), global healthcare and Chinese A-shares.
Fixed income: emerging-market sovereign bonds in local currency, capturing attractive real yields.
Alternatives: base metals exposure (copper, aluminium) to harness the secular trend of resource scarcity.
These convictions illustrate a shift from passive beta toward active, selective allocation across public and private markets.
7. From liquidity to legacy: investing for a sustainable future
While liquidity remains the short-term driver of returns, the ultimate challenge for global investors lies in aligning portfolios with a long-term, durable vision: a sustainable future. Resource scarcity, energy transition and demographic shifts redefine value creation.
Discipline in an everything bull market
The “everything bull market” is not without risk, yet its foundations remain robust: accommodative policy, broad corporate earnings strength and the global rotation beyond US assets.
Success in 2026 will depend on disciplined investment strategies, rigorous diversification and an unwavering focus on long-term value.
In a world awash with liquidity, prudence and perspective become the rarest commodities, and the truest sources of alpha.
Global Chief Investment Officer