JP Morgan AM anticipates that Europe will outpace the United States in growth over the next decade
“It has been a good year for risk assets and another demonstration that staying invested long-term eventually pays off,” summarized Lucía Gutiérrez-Mellado, Head of Strategy for JP Morgan Asset Management in Spain and Portugal, during the press breakfast where the firm presented its market outlook for the final quarter of 2025 and its projections for 2026.
During the event, the firm also commented on the publication of its new Long-Term Capital Market Assumptions report, a document in which it analyzes long-term forecasts. According to the study, European equities are expected to deliver an 8.5% return over the next decade, compared to 6.7% forecast for the United States and 7.2% for emerging markets.
“The growth differential between regions is significant and supports our more constructive outlook on Europe,” Gutiérrez-Mellado emphasized. She pointed out that the continent is undergoing an economic mindset shift, with increased investment in defense, infrastructure, and energy transition.
A positive year for markets, despite uncertainty
Despite 2025 being marked by uncertainty stemming from tariffs and global slowdown, the Strategy Director described the year as “surprisingly solid” for risk assets.
Emerging markets outperformed developed ones, the growth style beat value, and Japan stood out as one of the year’s top performers thanks to export momentum. Europe, by contrast, lost some traction compared to Asia and the U.S., where expectations of rate cuts by the Federal Reserve boosted investor confidence.
“It has been another year that proves selling at the worst moments is usually a mistake. Those who stayed invested have recovered their losses and are now gaining even more.” Gutiérrez-Mellado stressed the importance of maintaining global and diversified portfolios, noting that even after sharp declines, a balanced strategy tends to outperform cash over one- to three-year horizons.
Europe: more constructive, but with caveats
The firm believes Europe is at a turning point after years of weaker growth compared to the U.S. The continent “is changing its economic philosophy,” driven by a more active fiscal policy, the still-pending use of Next Generation EU funds, and increased spending on defense and energy.
However, the firm warns that the region remains exposed to risks such as a strong euro and global trade tensions.
In addition, the savings accumulated by European households in recent years could become an extra driver of consumption. “Unlike in the United States, European families were more cautious during the energy crisis,” the expert noted.
United States: solid earnings, but ‘not everything goes’
The U.S. economy is showing signs of moderation. Inflation hovers around 3%, the labor market is cooling slightly, and the Fed has begun a rate-cutting cycle after a nine-month pause. The firm expects two additional cuts before year-end, which would ease financial conditions and support consumption and small businesses.
On the corporate front, “companies have delivered positive surprises, demonstrating strong adaptability and efficiency.” In fact, the U.S. has recorded nine consecutive quarters of earnings growth, three of them above 10%.
However, in the expert’s view, the period of absolute dominance by the U.S. market may be peaking: “We remain exposed to the U.S., but we are more selective and believe other regions will offer better opportunities in the coming years,” she added. Currently, the firm maintains a neutral stance between the U.S. and Europe within its global portfolios.
China and emerging markets: two speeds, one opportunity
Regarding China, the country’s economy is “moving at two speeds”: while the real estate crisis and weak consumption persist, the technology and artificial intelligence sectors have seen rapid growth. “China’s technological leadership is undeniable and will be one of the main points of contention with the United States over the next decade.”
“Regional diversity is no longer a luxury, it’s a necessity,” said the expert, highlighting the importance of global portfolios that combine exposure to both developed and emerging markets.
Strategy: slight overweight in equities and active management
As for current positioning, the firm maintains a slight overweight in equities compared to fixed income. “The environment remains constructive for risk assets, although we maintain duration in portfolios in case growth disappoints,” she explained. Following spread compression, the firm has reduced its overweight in credit and maintains tactical exposure to sovereign debt.
By sector, JP Morgan AM shows a preference for high-quality technology, healthcare, and renewable energy—segments with structural growth potential. In commodities, the firm manages exposure in a diversified manner across both precious and industrial metals, while maintaining a neutral view on the dollar, with a medium-term expectation of slight depreciation.
