Secular Outlook 2026: Our 10-year investment outlook
Overview
Returns across traditional equity–bond portfolios are likely to be more modest over the next decade compared to the past 10 years, as the days of stimulus-fuelled gains give way to a world of higher government debt, lingering inflation and greater market volatility. This shift calls for a more dynamic approach to portfolio construction.
Key insights
- A more demanding environment will require investors to look beyond the traditional 60/40 mix, making greater use of income‑generating assets, active currency management and secular growth themes such as AI.
- As US exceptionalism fades, market leadership is set to change, with select European and emerging market assets offering compelling long‑term prospects.
- Private assets and structurally advantaged equity sectors can play a growing role in enhancing portfolio diversification, resilience and real returns over the coming decade.
Main findings
- Global economic growth will remain moderate, with AI‑driven productivity gains offset by high public debt and volatile inflation.
- Equity returns will be lower in the next 10 years compared to the the past decade; US leadership will persist but more rewarding opportunities broadening to Europe and emerging Asia.
- Dollar to decline by some 10-15% over the next decade, EM bonds to re-rate.
Implications
- Scale back exposure to equities and government bonds and allocate more capital to corporate credit and alternatives.
- Gradually rebalance away from a US‑centric equity portfolio by adding euro‑zone and emerging Asia exposure.
- Actively manage currency risk and increase allocations to EM bonds, real assets such as property and gold.
Source: LSEG, Bloomberg, Pictet Asset Management.
Forecasts covering period 30.04.2026-30.04.2036.
Secular Outlook 2026 webinar
Click on the link below to watch chief strategist Luca Paolini and senior multi asset strategist Arun Sai reveal what investors should expect to unfold over the next 10 years across both the global economy and financial markets.
Marketing communication
The information and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments or services. The information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any products or services offered or distributed by Pictet Asset Management. Pictet Asset Management has not ensured the suitability of the securities mentioned in this document for any specific investor, and it should not be relied upon as a substitute for independent judgment; investors are advised to determine the suitability of the investment based on their financial knowledge, experience, goals and situation, or to seek specific advice from an industry professional before making any investment decisions. Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. Investors may not get back the amount originally invested.
