Baering Asset Management expects the global economy to maintain a 'Goldilocks' state next year, sustaining stable growth without a recession despite policy shifts and geopolitical tensions.
Baering Asset Management published its '2026 Global Macroeconomic and Investment Outlook' report on December 15.
According to the report, the U.S. economy is likely to avoid a recession, although growth will slow somewhat due to the effects of high interest rates. Europe is supporting growth through monetary policy easing, while China is strengthening its fiscal stimulus measures. ASEAN and Latin America are benefiting from supply chain restructuring.
Baering Asset Management emphasized balanced global diversification as the core of its investment strategy. The company advised investors to move beyond U.S.-centric portfolios and capture growth opportunities across Europe and emerging markets. It also highlighted the need for long-term investments to respond to structural megatrends, including artificial intelligence (AI).
In the bond market, attention should be paid to long-term interest rate volatility and credit rating improvements. In particular, global high-yield bonds have undergone qualitative changes, with improved credit ratings and shorter durations compared to a decade ago.
Martin Hohn, Co-Head of Global Investments at Baering Asset Management, stated, "In an environment of policy uncertainty and high valuations, diversification is the most effective means of defense," adding, "It is important to maintain balance across styles, sectors, and regions." He further emphasized the need to pay close attention to assets in Europe and emerging markets.
Economist Robert Lee analyzed, "The expansion of the AI ecosystem and global supply chain restructuring are providing new opportunities for investors," and stressed, "Rather than focusing on specific regions, investors should secure long-term competitiveness through a global diversification strategy."
On December 10 (local time), the U.S. Federal Reserve cut the benchmark interest rate by 0.25 percentage points. The global financial environment is expected to become even more accommodative. With more than $4.8 trillion in money market fund (MMF) assets held by U.S. households, there is a possibility that these funds will shift to bonds and stocks as interest rates are lowered. Central banks in each country also have greater flexibility to implement policies tailored to their own circumstances.
Baering Asset Management expects these changes to provide positive momentum for the investment environment next year and once again emphasized the importance of a balanced global diversification strategy.
Baering Asset Management is a subsidiary of the major U.S. life insurer MassMutual. It is a global comprehensive asset management firm overseeing more than $470 billion in assets.
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