Investment Trends

U.S. Equities:

  • Small cap generally poised for a rise. With large-cap counterparts are faltering, small-cap companies have the chance to capitalize.
  • Active management of US equities will become a popular investment theme while trends move away from passive investment styles.

Fixed Income:

  • Muni bonds will continue to perform.
  • US treasuries in flux: with many anticipating the Fed will increase the target rate at some point, the future for Treasuries is uncertain. Whether the rate change will happen and what the impact will be on yields is a point of debate within the investment community. Higher rates would also hurt the gold industry.
  • Inflation-linked bonds could be a factor: these strategies help manage interest rate sensitivity while yields and inflation premiums are low.
  • Fixed income ETFs likely to proliferate as an alternative to passive strategies.

Global:

  • Emerging markets expected to continue to rise: global and international strategies stay strong. Regional strategies such as EMD/EME will likely be less attractive.
  • Emerging market bonds should be a main player in the hunt for year, with Asia leading the charge.
  • The recent oil price drop is going to have an impact globally and could lead to GDP growth in both developed and emerging economies.

Alternatives:

  • Institutional and retail investors continue to be concerned about managing volatility and preserving capital.
  • Multi-asset, real asset, and smart beta type products continue to grow in popularity.
  • Liquid alternatives (long-short equity funds, market neutral, managed futures, multi-alternative and nontraditional bond funds) have a low correlation to stocks and bonds, and are consequently likely to see growth as investors seek to diversify their portfolios.
  • Real estate growth expected; US markets are attractive to foreign investors.