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If the Historical Trend Continues, the Dollar Could Decline By 8% in 2026

History suggests major dollar sell-offs tend to occur in consecutive years. This is the conclusion reached by Bank of America after analyzing the behavior of the U.S. dollar since the 1980s. Looking ahead to this year, the institution argues that the closest historical analogues point to an additional 8% decline in the Dollar Index (DXY Index) in 2026.

“2018 was the exception, but it coincided with Fed rate hikes, the trade war, and weak European growth. For now, the dollar remains in broad downward trends against G10 currencies. The fact that global equities are outperforming U.S. equities at the start of 2026 warrants attention,” they argue.

Reference to 1995

Focusing on the dollar’s decline in 2025, the institution explains that in the main historical analogues with the highest correlation to last year’s dollar movements, the dollar’s weakness continued the following year in four out of five cases. “The average of the five best analogues would imply an additional -8% drop in the dollar in 2026. Among these analogues, 1995 may be the most relevant for 2026, as it also featured a soft landing of the U.S. economy driven by technology and Fed rate cuts in the second half of the year. The dollar weakened by -4.2% in 1995, close to our forecast that the DXY index will fall toward the 95 level in 2026,” the report notes.

They also highlight that 2018 was an unusual year in which the dollar reversed its 2017 losses and rose by 4.7% due to Fed rate hikes, headlines surrounding the U.S., China trade war, and a weak eurozone economy. According to their analysis, despite a moderate rebound toward the end of 2025, the dollar remains in broad downward trends against G10 currencies. “Global equity markets also began 2026 outperforming the U.S. This factor deserves attention, as equity flows and hedging could become a clearly bearish trigger for the dollar in 2026,” they add.

Years “Similar” to 2025

The dollar fell by 9.4% in 2025 against G10 currencies, according to the DXY index, making it the second-largest annual dollar decline in the past two decades. In identifying the historical years most closely correlated with the dollar’s performance in 2025 and drawing possible implications for 2026, the institution highlights 2005, 1995, and 1975.

Since 1975, the five closest historical analogues have shown an average correlation of 81% with the dollar’s performance in 2025, the report states.

In those five years, the dollar weakened by an average of 10.5%, with most of the decline concentrated in the first half of the year, similar to what occurred in 2025. And in all five historical analogues, the dollar continued to fall the following year, with the sole exception of 2018. On average, the dollar recorded a further 8.3% drop in the subsequent year.

The report also argues that 1995 may be the most relevant analogue for 2026 among the DXY’s imperfect historical comparisons. According to the bank’s analysis, tech-driven growth helped the U.S. economy achieve a soft landing instead of a recession. Additionally, the Fed began cutting rates in the second half of 1995, even though inflation was closer to 3% than 2%.

In light of these findings, the conclusion is that large dollar sell-offs rarely happen in isolation: “This bearish quantitative outcome supports our base case for currencies in 2026, where we expect further dollar weakness due to interest rate convergence between the U.S. and the rest of the world post-Powell, stimulus in the eurozone and China, and increased currency hedging on dollar-denominated assets.”

Outlook for 2026

Looking ahead, Bank of America expects the U.S. economy to struggle after a temporary setback in Q4 2025 caused by the government shutdown, and sees the Fed continuing to cut rates after midyear. Under this scenario, the 1995 analogue alone would imply a further 4.2% decline in the dollar, closely in line with the bank’s forecast for the DXY to fall toward the 95 level in 2026.

Another key observation is that divergence in equity markets could prolong the dollar’s downward trend in 2026. “Although U.S. stock markets reached new all-time highs at the start of 2026, their performance has lagged most global equity markets. With global central bank easing cycles nearing their end, the FX regime is gradually shifting from being almost entirely rate-driven, as it was between 2022 and 2024, to being more influenced by equities. The relative performance of equity markets across countries should be watched closely, as continued divergence like we’ve seen so far in 2026 could become a major bearish driver for the dollar,” the Bank of America report concludes.

Infrastructure Funds Hit Historic Record: $1.35 Trillion

| By Marta Rodriguez | 0 Comentarios

A new analysis by Ocorian, specialists in asset services for private markets and corporate and fiduciary administration, reveals that assets in infrastructure funds have reached a record high of $1.35 billion. Their value has more than doubled since 2020, when it stood at $652 billion, and has grown 10% since December 2024, according to the latest Global Asset Monitor from Ocorian.

The firm projects a further 70% increase by 2030, which would bring total assets in global infrastructure funds to $2.3 trillion.

The analysis shows that nearly half (47%) of the underlying assets in infrastructure funds are located in North America, while two-fifths are in Europe. Europe is nearing North America in terms of fund domicile, and Asia-based funds represent about one-sixth of the total.

“Infrastructure investment AUM has grown 10% this year, reaching $1.35 trillion. AI infrastructure, the energy transition, and decarbonization are key drivers of this growth, showing that investors are committing long-term capital to critical sectors and assets that support real economic resilience and sustained returns,” says Yegor Lanovenko, Global Co-Head of Fund Services at Ocorian.

“At Ocorian, we support alternative asset managers in navigating operational and regulatory complexity across the entire investment lifecycle, especially where operational scale makes a difference and investor needs and profiles are rapidly evolving across asset classes,” Lanovenko concludes.

Markets on Edge Over the New Clash Between Powell and Trump

| By Marta Rodriguez | 0 Comentarios

It seems the Trump administration intends to make the final months of Jerome Powell’s tenure at the Federal Reserve more difficult. Over the weekend, the Department of Justice launched a criminal investigation into the Federal Reserve (Fed) over the renovation of the central bank’s headquarters. Jerome Powell, its chairman, views this as a pretext to escalate pressure on the Fed, as President Trump remains dissatisfied with monetary policy, putting the central bank’s independence at risk.

How Have Markets Responded to This Latest Episode?

According to experts, as in previous cases, the Fed’s lack of independence doesn’t go unnoticed, and markets don’t like it. “The global financial ecosystem has entered a phase of systemic volatility and power realignment reminiscent of periods of intense geopolitical friction in the 20th century. The convergence of an institutional crisis at the heart of the Federal Reserve, an aggressive resource-grabbing policy in the Southern Hemisphere, and escalating tensions in the Arctic and Middle East has fractured the stability narrative that dominated the end of last year,” says Felipe Mendoza, CEO of IMB Capital Quants.

Jon Butcher, Senior U.S. Economist at Aberdeen, notes that the initial market reaction appears negative, with rising risks that a devaluation could weigh on the U.S. dollar, equities, and bonds. In particular, he warns, “the long end of the curve could see an increase in term premiums.” In his view, this also raises questions about the composition of the Fed’s Board of Governors. “A new chair is expected to be appointed this month, likely filling the seat of Stephen Miran, whose term ends on January 31. However, Republican Senator Thom Tillis has stated he will oppose any Fed nomination until this legal matter is fully resolved,” Butcher explains.

Powell’s term as a governor runs through 2028, and he had been expected to step down once his term as chair ends in May. However, his recent statement raises questions about whether he will remain on the Board to defend the Fed’s independence despite legal risks. “Regardless of whether this legal action has merit, it signals the administration’s willingness to continue pressuring the Fed to adopt a more accommodative monetary policy. Given that President Donald Trump is also considering fiscal measures that would widen the deficit, we expect growing concerns over fiscal dominance and the external risk of yield curve control,” Butcher adds.

The Question of Independence

Paul Donovan, Chief Economist at UBS Global Wealth Management, believes that if the move is aimed at weakening the Fed’s independence, it could backfire on the administration. He speculates that Powell now has “less incentive to resign as a Fed governor, given the publicly defiant stance he has taken against this criminal investigation.”

“Trump doesn’t directly appoint the next Fed chair—he only nominates the candidate,” he continues. “That candidate must either be a sitting governor or fill a board vacancy. The Senate must confirm the next Fed chair, and that process could become more complicated if this situation is seen as a direct attack on the central bank’s independence.”

Donovan outlines a more extreme scenario, suggesting that if a future interest rate decision is particularly close, “these explicit attacks on central bank independence could push FOMC members toward a more hawkish stance as a show of autonomy.” In fact, he argues, based on market reactions, that may be the safest response from a bond market perspective. “The need to underline independence could become a key factor in rate-setting, both institutionally and in terms of market consequences,” he emphasizes.

The Gold Market Narrative

For Carsten Menke, Head of Next Generation Research at Julius Baer, it’s clear that concerns over the Fed’s independence are being reflected in the commodities market. “Gold and silver reacted positively to the news, rising 1.5% and 5% respectively in early Monday trading. We see increased interference in the Fed as a clearly bullish wildcard for precious metals in 2026. While silver is expected to respond more strongly to such concerns, we still believe its outperformance relative to gold has become excessive,” says Menke.

He concludes that, although the U.S. dollar is also weakening, the reaction in precious metals markets, especially silver, seems somewhat disproportionate. For Menke, growing interference with the Fed and doubts about its independence are among the main bullish wildcards for precious metals in 2026. “With Powell’s expected departure in May, the future of the Fed’s independence will hinge on whether his successor acts independently or aligns closely with the administration. Ongoing concerns over the Fed’s independence and the U.S. dollar’s status as the world’s reserve currency could drive more safe-haven investment into gold and silver, pushing prices even higher than current levels,” he adds.

Powell Defends the Fed

In a rare statement from a central bank chair, Powell said the move represents “an unprecedented action” that should be understood “in the broader context of the administration’s threats and continued pressure.” He stated:

“This new threat has nothing to do with my June testimony or the renovation of the Federal Reserve buildings. Nor does it relate to the Congressional oversight function; the Fed, through testimony and other public disclosures, has made every effort to keep Congress informed about the renovation project. These are pretexts. The threat of criminal charges stems from the Federal Reserve setting interest rates based on our best judgment of what serves the public interest, rather than following the President’s preferences. The real issue is whether the Fed will continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be dictated by political pressure or intimidation.”

To help restore confidence in the monetary institution, he added that throughout his service under four different administrations, he has performed his duties without fear or political favoritism, focusing solely on the Fed’s dual mandate of price stability and maximum employment.

“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serve the American people,” Powell concluded in his statement.

Goldman Sachs Forecasts an 11% Return for Global Markets Over the Next 12 Months

| By Marta Rodriguez | 0 Comentarios

The global bull market could continue in 2026, supported by growth in corporate earnings and resilient economic activity, although equity gains are unlikely to match the strong advance seen in 2025, according to Goldman Sachs Research. The firm expects continued global economic expansion across all regions and further moderate rate cuts by the U.S. Federal Reserve.

“Given this macroeconomic backdrop, it would be unusual to see a significant equity pullback or a bear market without a recession, even starting from elevated valuations,” writes Peter Oppenheimer, Chief Global Equity Strategist at Goldman Sachs Research, in the report Global Equity Strategy 2026 Outlook: Tech Tonic—A Broadening Bull Market.

Looking back, diversification was a central theme for Goldman Sachs Research last year. “Investors who diversified across regions in 2025 were rewarded for the first time in many years, and analysts expect diversification to continue in 2026, extending to investment factors such as growth and value, as well as across different sectors,” they explain.

Outlook for Global Equities in 2026

“We believe that returns in 2026 will be driven more by earnings growth than by rising valuations,” says Oppenheimer. The 12-month global forecast suggests that stock prices, weighted by regional market capitalization, could rise by 9% and deliver a total return of 11% including dividends, in U.S. dollars. “Most of these returns are driven by earnings,” he adds. Commodity indexes could also advance this year, with gains in precious metals once again offsetting declines in energy, as was the case in 2025, according to Goldman Sachs.

Diversification and Market Cycle

Oppenheimer’s team analyzes the typical phases of market cycles: despair during bear markets, a brief phase of hope after the initial rebound, a longer period of growth driven by rising earnings, and finally, a phase of optimism as investor confidence builds.

According to this analysis, equities are currently in the optimism phase of a cycle that began with the 2020 bear market during the pandemic. This stage is typically accompanied by rising valuations, suggesting some upside risks to baseline forecasts.

Should Investors Diversify in 2026?

Geographic diversification benefited investors in 2025, an unusual outcome, as the United States underperformed other major markets for the first time in nearly 15 years. Equity returns in Europe, China, and Asia were nearly double those of the S&P 500 in dollar terms, supported by the weakness of the U.S. currency.

While U.S. equities were driven primarily by earnings growth, especially among large tech companies, markets outside the U.S. showed a more balanced mix of improving corporate results and rising valuations. The growth-adjusted valuation gap between the U.S. and the rest of the world narrowed last year.

“We expect this convergence in growth-adjusted valuation ratios to continue in 2026, even though absolute valuations in the U.S. are likely to remain higher,” notes Oppenheimer’s team.

Diversification is expected to continue offering potential to enhance risk-adjusted returns in 2026. Investors may consider broad geographic exposure, including a greater focus on emerging markets, while combining growth and value stocks and diversifying across sectors.

Elevated Valuations and Sector Opportunities

Although equities performed strongly in 2025, outperforming both commodities and bonds, gains were not linear. The S&P 500 saw a nearly 20% correction between mid-February and April before rebounding. The sharp recovery that followed has left valuations at historically high levels across all regions, including Japan, Europe, and emerging markets.

Oppenheimer notes that non-technology sectors could perform well this year, and investors may benefit from companies that indirectly gain from capital investment by tech firms. Interest is also expected to grow in companies outside the tech sector as new capabilities related to artificial intelligence begin to materialize.

Is There a Bubble in Artificial Intelligence?

Market interest in artificial intelligence remains intense, though this does not necessarily signal a bubble. The dominance of the tech sector began after the financial crisis and has been supported by stronger-than-average earnings growth.

While the share prices of major tech companies have risen sharply, valuations are not as extreme as in past cycles, such as the peak of the tech bubble in 2000.

Labor Market in U.S.: Superficial Stability and Underlying Pressures

| By Marta Rodriguez | 0 Comentarios

The year begins with few surprises on the macroeconomic front. The U.S. labor market remains in a gray area: hiring appears sluggish, yet there are no significant increases in layoffs. The December ADP private employment report came in below expectations (41,000 vs. the expected 50,000), although it confirms a trend of stability since mid-2025. For Friday’s payroll report, an increase of around 60,000 jobs is anticipated, along with a slight improvement in the unemployment rate from 4.6% to 4.5%.

The November JOLTS survey reinforced this mixed picture: job openings declined from 7.67 to 7.15 million, but voluntary quits rose, typically a sign of worker confidence. Layoffs remain stable. The message? A fragile balance, with no clear signs of acceleration or systemic deterioration. Even so, the divergence between public and private employment could distort the broader interpretation. The BLS’s upcoming methodological revision in February could mark a turning point in how labor data is assessed.

In this context, the Fed maintains its “wait and see” approach, with growing attention on employment trends as a key variable for adjusting monetary policy. The possibility of an additional rate cut by mid-2026 will largely depend on how the labor market evolves in the second quarter.

Growth, CAPEX, and Focus on the Tech Sector

The Atlanta Fed’s GDP model projects above-potential growth. The recovery remains concentrated in specific sectors, such as technology, which generate little direct employment. Focus will turn to fourth-quarter results from hyperscalers to assess whether investment momentum is holding. However, BEA data shows that tech CAPEX has lost traction in recent months.

The potential slowdown in tech investment comes at a time when the market is beginning to demand concrete results. Investors are no longer rewarding narratives alone, they are starting to penalize models without clear profitability. This could lead to a rotation toward sectors with more visible fundamentals.

ISM Services and Favorable Signals for Risk Assets

The ISM services index exceeded expectations (54.4) and showed improvements in the new orders and employment components (the latter rising to 52, entering expansion territory), while the prices subindex declined. This combination of easing inflationary pressure and modest gains in activity and employment is favorable for risk assets, helping to keep the 10-year Treasury yield below 4.2%. That, in turn, supports equity valuations and strengthens expectations that the Fed could cut rates more than markets had anticipated after its last meeting.

The composite ISM and JOLTS indicators support the case for wage moderation. Layoffs are at a six-month low, and the Challenger index fell from +23.5% to -8.3% in December. This environment reinforces the post-pandemic normalization narrative, with a soft landing increasingly gaining traction as the baseline scenario.

AI, Productivity, and Pressure on Wages

The accelerated adoption of AI tools is beginning to show effects on productivity and labor structure. While it enhances efficiency, it also reduces employees’ bargaining power, contributing to further moderation of real wages in 2026.

Although large-scale AI investment began in 2024, its impact on productivity remains uneven. Some major companies have achieved tangible improvements, while others are still in the exploratory phase. The market is beginning to differentiate between those with a clear monetization strategy and those without.

This shift in focus will also have implications for the labor market. Sectors such as financial services, marketing, and administrative technology could see workforce adjustments in favor of leaner structures.

Energy, Housing, and the Electoral Agenda

On the geopolitical front, U.S. control of Venezuela’s oil sector, with a projected release of 30 to 50 million barrels, could stabilize crude prices between $50 and $60. This aligns with Trump’s goals of protecting the purchasing power of his electoral base.

President Trump is also seeking to improve housing access. His proposals include limiting the role of institutional investors in the residential market, allowing retirement savings to be used for home purchases, and promoting mortgage portability. In addition, he is pressuring Fannie Mae and Freddie Mac to acquire up to $200 billion in MBS, which would lower real estate financing costs. If fully implemented, the 30-year mortgage rate could fall below 6%, compared to the historical average spread of 1.76% over the 10-year Treasury (currently at 2.03%).

These measures carry a strong electoral component. The early 2025 ResiClub survey suggests they could help revive the housing market. Understanding the behavior of the “lower leg” of the K-shaped economy will be key to sector allocation in portfolios.

Political Stimulus and Inflation Expectations

With limited fiscal space (debt-to-GDP above 120%), Republicans may intensify the use of alternative policies: deregulation, tax cuts, selective tariff reductions, and access to cheaper financing. The OBBBA plan will play a key role in catalyzing investment during the first half of the year.

At the same time, inflation could ease more than expected in the second half of 2026. The impact of tariffs is likely to fade, and productivity gains from AI may have a meaningful disinflationary effect. Trump may also choose to ease certain trade sanctions (including those on China), aiming to support growth and broaden his electoral base.

In addition, private consumption could rebound if direct transfer mechanisms, such as checks or temporary subsidies, are activated. The conditions for a more expansive second half in terms of consumption are in place, as long as external shocks do not materialize.

Sector Rotation and a Rally Beyond Technology

While AI-related CAPEX and productivity gains are expected to remain in the spotlight, the rally could extend to previously lagging sectors such as industrials and consumer goods. Active sector selection will be key in 2026 to capture shifts in the composition of growth. Valuations continue to show exploitable dispersion.

In this environment, maintaining a balanced exposure across technology, advanced manufacturing, and services could be a prudent strategy. Additionally, cyclical sectors may benefit from an extended economic cycle if consumption holds and inflation continues to ease.

Tactically, the combination of contained interest rates, disinflationary pressure, and active policy measures could create a favorable backdrop for maintaining exposure to risk assets during the first half of the year. However, we anticipate increased volatility and will be monitoring historical parallels with U.S. midterm election periods.

How to Transition Smoothly From the Transactional Model to the Advisory Model Without Disrupting the Client

| By Marta Rodriguez | 0 Comentarios

Photo courtesyFrom left to right: Michael Averett, Chief Revenue Officer for Insigneo; Mariano Huidobro, SVP Financial Advisor at Insigneo; Edward Varona, Insigneo advisor; Juan Carlos Amado, Financial Advisor at Insigneo; and Andres Brik, Senior Vice President at Insigneo.

During Insigneo’s triennial event held in Seville in November 2025, several of the firm’s financial advisors shared their vision on how they are guiding their clients through the transition toward advisory services, moving away from the more traditional transactional model common among broker-dealers in the region. Far from framing it as a simple “account change,” the panelists agreed that the shift to the advisory model is driven by a combination of good timing, financial education, transparency, and client connection. Above all, they recognize that this change stems from the advisor’s ability to deliver excellence to their clients.

“For me, in a broad sense, excellence is about giving more of yourself—something similar to what happens in sports. For example, Kobe Bryant used to do something different; he didn’t have extraordinary talent. His team was willing to give more, just like we want to give more to our clients every day, and that’s why I believe excellence is built when no one is watching. Working late nights, training hard, improving 1% in every small thing 1,000 times, it’s a process of hard work, not a single performance. We aspire to excellence as a team, and I believe we have the best team,” said Juan Carlos Amado, Financial Advisor at Insigneo.

In the view of Edward Varona, Insigneo advisor, excellence is achieved by adopting a different mindset. “If we analyze a problem, for example, how to manage volatility, we need to step back and figure out where we might fail so we can avoid it. The key is, if we can prevent volatility by explaining to clients that it’s not about constantly watching the screen, then that kind of proposal and way of thinking will add value,” Varona explained during the panel discussion.

A Transition Built on Experience

Advisors are confident in their ability to provide excellence and added value to clients; now comes the more complex part: transitioning to a model of explicitly paid advisory services. Along this path, one of the concepts most often mentioned by advisors was the use of so-called “natural transition moments.” Situations such as a platform shutting down or structural changes in a firm, for example, the closure of Wells Fargo Advisors, force clients to move their assets. Rather than replicating the old setup, advisors use this moment to reframe the relationship and focus on becoming more efficient and improving client service.

That was the case in the experience shared by Varona, a former Wells Fargo advisor, during the panel. “In my case, I was quite lucky, it was like being in the right place at the right time. We built our business from our branch with a synergy-focused approach and a solid team. So, when the shutdown happened, I almost saw it as my own ‘Liberation Day,’ because I was able to continue working within a model where advisory is a key and integral part of the business and your frontline operations,” Varona recalled.

For Andres Brik, Senior Vice President at Insigneo, the journey was a mix of conviction and passion, culminating in a single proposition: the advisory model. “We like to take the reins of investment, even in more complex assets like alternatives and private markets. I do believe that, as markets evolve, clients need to understand that financial education is extremely important, especially for private assets. This is work we do by combining education, the technology from various providers, and quarterly reviews. The result is that when something happens in the market, like last year’s ‘Liberation Day’, we don’t get calls from clients asking what’s going on, because they know exactly what they have in their portfolios and how those assets behave. They’re fully aware of what they hold,” he explained.

Making the Case to Clients and the Next Generation

When it comes to knowledge, advisors aren’t just referring to how assets or portfolios work, but also to the cost of investment, of advisory services, and the margins involved. As Varona acknowledged, that was one of his strongest arguments when guiding clients through this transition. “I showed clients, openly and transparently, the fees—so they could decide for themselves. We were also lucky because, right in the middle of the transition, we saw that Insigneo’s IMAPS program was available. The other thing we did was, for every new client opening an account, I’d set up a dual scheme: a transactional account and an advisory account. And I’d explain: ‘Look, we have these mutual funds. And math doesn’t lie; it comes down to that, math doesn’t lie. There’s an internal expense ratio. These firms need to keep the lights on, you know. So, if we move from here to here, from this share class to that one, you’re going to save money.’ That’s basically it,” Varona recalled during the event.

Beyond transparency with the client, advisors emphasized that the advisory model is better aligned with today’s expectations, and especially with those of the next generation. “One of the common and key factors is listening to what your client has to say. We have two ears, two eyes, and only one mouth, there’s a reason for that. To connect with the client and understand their needs, you have to listen: what is their body language telling you, what is their attitude saying? It’s essential to earning their trust. And having younger professionals on the team also helps improve that empathy, especially with younger generations,” noted Mariano Huidobro, SVP Financial Advisor at Insigneo, who shared his experience on the panel.

Among other conclusions presented by the advisors regarding the advisory model were the importance of professional and ongoing management, consistency with goals and risk profile, long-term planning, and a clear fee structure, all of which are increasingly valued by heirs and younger clients. These elements become especially relevant when navigating uncertain cycles and environments, as in 2025. In this regard, Amado emphasized that advisors must prepare clients for volatility. “Volatility is the price you pay to stay in the game. But then comes the question of how you can reduce volatility with the range of products we have. And I firmly believe that Insigneo has a platform that gives clients access to an unmatched range of products. For me, private infrastructure plays a very important role in reducing volatility without sacrificing returns, taking fees into account. When you go through those storms with the client, explaining why something is happening now and how their portfolio is positioned for it, and show them that every time we’ve been through this before, the market recovered and so did the portfolio, then the transition becomes much more manageable,” he pointed out.

The Value of Advisory

Up to this point, Insigneo’s advisors are clear on the value they deliver, but as they themselves admit, it’s difficult to price their service. “The transactional part of the business is like a commodity: it’s very hard to prove your value if you’re not adding any. That’s why, among brokers, we do a lot of non-discretionary advisory. But I also think it’s important to move forward and start developing the advisory business. IMAPS is a very good solution because you have the entire senior team, strong performance, and it’s a way to start building an advisory business. Another path is through the technology we have, Orion, which integrates accounts and lets you access other parts of the client’s wealth held on other platforms. That way, you can provide real advisory on their true asset allocation,” concluded Huidobro.

Trends in ETFs: The Good, the Bad, and the Too Early to Judge

| By Marta Rodriguez | 0 Comentarios

In the early 1990s, the world’s first exchange-traded fund (ETF) was launched on the Toronto Stock Exchange. Just three years later, the first U.S. ETF debuted: the SPDR S&P 500 ETF Trust. From those humble beginnings, ETFs have come a long way. The industry likely closed 2025 with record levels of assets under management, both in the United States and other regions around the world. This scenario is not without underlying trends that are poised to continue transforming the sector. Morningstar analysts have weighed in on the positives and negatives ahead, as well as which trends are still too early to judge.

Active ETFs

Active ETFs are currently in the spotlight, with assets under management likely reaching record levels in both the U.S. and Europe. While active ETFs have existed for nearly two decades, they’ve recently gained momentum thanks to regulatory changes, for instance, in 2029, the U.S. SEC introduced Rule 6c-11, also known as the “ETF Rule.” This regulatory shift “streamlined the ETF approval process and allowed all funds subject to the rule to use custom creation and redemption baskets to enhance their prospective tax efficiency,” according to Morningstar.

In this area, Morningstar analysts believe that active ETFs “can be a lifeline for active managers.” As a group, actively managed funds have generally failed to outperform their benchmarks significantly, as the firm notes, although some active managers have delivered strong relative results.

Active ETFs are more established in the U.S. and are growing in Europe. Overall, the market is still young, and many active ETFs have launched during a bull market, but Morningstar analysts expect them to grow in both size and number. “The availability of more options can benefit investors but will likely lead to a more complex and competitive environment,” they admit.

While the ETF structure can often provide transparency, lower costs, and, in some countries, tax efficiency, the firm emphasizes that there’s no guarantee active management will deliver positive relative returns. “It’s essential that investors and advisors conduct a rigorous due diligence process to select the right manager,” they conclude.

Are Private Markets and ETFs Compatible?

As public and private markets converge, new ways of accessing private investments are emerging. In 2025, State Street and Apollo launched the world’s first private credit ETF: the SPDR SSGA IG Public & Private Credit ETF.

This product aims to invest in both public and private credit through an ETF. The public portion includes fixed income securities such as corporate bonds and syndicated bank loans, “nothing out of the ordinary in the ETF space.” The private portion, however, is the more interesting element. Traditionally, private credit has been out of reach for most investors, but this ETF seeks to change that. While this unprecedented ETF could mark the beginning of a new era in private market investing, significant concerns remain, especially regarding liquidity and redemptions, since private credit is difficult to trade.

With that in mind, Morningstar analysts’ verdict on this emerging trend is that while the convergence of public and private markets is underway, “like the SEC, we have reservations about the structure, it’s still too early to determine whether it will succeed or be short-lived.”

The Rise of Defined Outcome ETFs

Defined outcome ETFs use options to limit a portfolio’s losses over a given period in exchange for capping gains. They fall under the category of actively managed instruments and are designed to be bought and held at the beginning and end of a set period. So far, they’ve proven very popular with investors, particularly those with a strong aversion to risk or shorter investment horizons.

According to Morningstar analysts, defined outcome ETFs have worked…so far. Their analysis shows that the average amount invested in these products has delivered annual returns of around 10.7%, outperforming the aggregate total return of 9.4% for ETFs. However, they warn investors that defined outcome ETFs come with higher fees, a complex structure, partial exposure to market losses, and no dividend payouts.

Generating Income Through Income-Oriented ETFs

Income-generating ETFs seek to provide income through derivatives and often use strategies such as writing or selling options, entering into futures contracts, and other derivative-based trades to enhance income. These products have gained popularity thanks to their potential for delivering higher yields compared to traditional income-generating investments like bonds or dividend-paying stocks.

But Morningstar cautions that, over the long term, “these ETFs are unlikely to outperform the market as a buy-and-hold strategy, and for investors with significant short-term liquidity needs, they could drain liquidity from their portfolios.”

ESG and Thematic ETFs

While many of the ETF categories mentioned above are on the rise, the same cannot be said for ESG or thematic ETFs. Key factors driving this decline include prevailing attitudes toward ESG considerations and regulatory uncertainty.

Morningstar analysts cite several interconnected factors contributing to the drop in ESG ETFs. Among them: a complex geopolitical environment that has led Europe to deprioritize sustainability goals in favor of economic growth, competitiveness, and defense. Additionally, ongoing uncertainty around regulation, especially the EU’s Sustainable Finance Disclosure Regulation (SFDR), has made firms hesitant to launch ESG products and strategies.

In the U.S., former President Donald Trump’s anti-climate and anti-ESG policies have also led American asset managers to be more cautious in promoting their ESG credentials.

Strategic Beta Products: The Best of Both Worlds

While active ETFs are on the rise, ETFs have historically been associated with passive investment strategies. However, there is a third investment approach worth noting: strategic beta, also known as smart beta, which “seeks to combine the advantages of both passive and active investment strategies.”

Although they’ve existed since the mid-2000s, they gained traction after the 2008 financial crisis and surged throughout the 2010s.

“They represent a sophisticated approach to achieving alpha, selecting and weighting positions based on specific factor criteria,” the firm notes. They track an index, like a passive fund, but instead of being weighted by market capitalization, they follow a factor-based index.

These ETFs are designed to capture academically proven factors linked to success, such as value, volatility, and quality, which have historically been favored by active managers and have shown superior performance over longer periods.

Morningstar analysts conclude that “while many fund innovations fail, strategic beta has avoided that fate by being passive, inexpensive, and delivering predictable returns.” They explain that compared to actively managed rivals, “strategic beta funds don’t ‘drift’ from their investment approaches.”

Janus Henderson Signs a Distribution Agreement with HSBC to Launch a Thematic Global Equity Fund

| By Marta Rodriguez | 0 Comentarios

Janus Henderson Investors has announced the launch of the Janus Henderson Horizon Discovering New Alpha Fund (DNA), a global equity fund available exclusively to HSBC Private Bank and Premier clients in Asia, Europe, US Offshore, and the Middle East for an initial six-month period.

DNA is a globally diversified portfolio comprising approximately 50 high-conviction stocks aligned with structural trends that are expected to shape future markets. It was designed as a solution to address investors’ growing concern that performance is increasingly being driven by a small group of companies.

The fund employs a dynamic and innovative approach to global equities, going beyond traditional funds and indices to identify emerging opportunities and companies with long-term growth potential. A proprietary optimization process is used to minimize biases and enhance diversification.

Led by experienced portfolio managers Richard Clode and Nick Harper, DNA leverages Janus Henderson’s global team of experts across technology, healthcare, financials, real estate, emerging markets, sustainability, and natural resources, providing access to a wide range of exposures across sectors, market capitalizations, and geographies. This approach reflects Janus Henderson’s commitment to delivering innovative solutions that help clients discover new sources of alpha amid evolving global dynamics.

DNA uses themes to guide idea generation, focusing on seven areas of transformation, smarter automation, mobility, lifestyle shifts, longevity, biotechnology, sovereignty, and net zero 2.0, to identify companies with long-term growth potential. The fund is built on the best ideas of Janus Henderson’s seasoned stock pickers, combined to create a balanced global equity portfolio.

“When we set out to create the DNA fund, we wanted to tap into the true DNA of Janus Henderson, which is the differentiated and proven expertise of our teams in stock selection. Our goal is to identify today the winners of tomorrow,” said Richard Clode, Portfolio Manager at Janus Henderson.

For his part, Ali Dibadj, CEO of Janus Henderson, commented that this agreement with HSBC “reflects our shared commitment to putting clients first and delivering a differentiated proposition that helps investors navigate the evolving market landscape.” Likewise, Lavanya Chari, Global Head of Wealth and Premier Solutions at HSBC, added that this collaboration with Janus Henderson “enables our clients to uncover new investment opportunities beyond AI, while mitigating portfolio concentration risk.”

Secondaries and Evergreen Funds: Venture Capital Strategies to Revive the Unicorn Market

| By Marta Rodriguez | 0 Comentarios

From 2005 to the First Half of 2025, Preqin Has Tracked Nearly 2,000 Global Unicorns, privately held companies backed by venture capital (VC) firms that reached a valuation above $1 billion. The number of unicorns created by venture capital rose from just two in 2005 to more than 500 in 2021, the peak year for this market. In fact, from early 2019 to the end of 2022, more than five companies per week reached a valuation of $1 billion or more. Currently, the number of unicorns recorded since 2005 stands at 1,908.

Much of the global coverage of the unicorn boom has focused on the entrepreneurial stories of the founders of these companies or on the vision and risk appetite of the most renowned venture capital investors. The latest Preqin report, “Unicorns: The Private Capital Take,” analyzes private equity data and the ecosystem in which unicorn companies are born, grow, develop, and go to market.

For example, the number of venture capital funds closed in 2024, the last full year with available data, was the lowest since 2015. In addition, the total capital raised, amounting to $122.5 billion, was also the lowest since that year. Both venture capital deal volume and total deal value have been declining since 2021. Moreover, the exit market is practically closed for VC-backed companies, though there are signs of improvement. Likewise, dry powder began to decline in 2024, in line with a slight uptick in the number of new unicorns created.

Sola Akinola, Managing Director at Preqin, states in the report that the era of “easy unicorn creation” is over. In a context of delayed exits by VC funds, down rounds, and more difficult liquidity, investors “can no longer rely on headlines alone.” According to the expert, what now matters is “clarity: distinguishing lasting companies from those inflated by the era of 0% interest rates.” To do this, she says, “reliable, documented information is needed to track these companies beyond the $1 billion threshold, through secondary deals, continuation funds, and real-world outcomes.” Ultimately, she concludes that in a market defined by uncertainty, “the edge lies in connecting the dots faster and more transparently than anyone else.”

X-Ray of the Unicorn Market

The global landscape of unicorn creation since 2005 has been dominated by the United States. More than half of all companies that reach a valuation of over $1 billion fly the American flag: the United States has accounted for 1,020 unicorns over the past 20 years. However, two fast-growing economies are following close behind: China already counts 252 companies with valuations above $1 billion, and India, 152. Europe, for its part, has a total of 539 unicorns.

One theory circulating in the markets about the reasons for this trend is that the brilliance of U.S. unicorn companies is not the key factor in their success. The Preqin report includes remarks by Jeff Bezos, founder of Amazon, at a New York Times event, where he stated that the United States has a better “venture capital system.” In his view, the availability of $15 million in seed capital for opportunities with just a 10% chance of success in the U.S. sets it apart from Europe, where many financial features, such as the banking system, are otherwise comparable.

Deal data collected by Preqin from 2005 to the first half of 2025 shows 29,890 early-stage deals in the U.S., worth $81 billion, compared to 14,943 deals worth $31 billion in all of Europe during the same period. Additionally, it takes less capital in the U.S. to reach unicorn status: $158 million compared to $198 million in Europe. It also takes less time, an average of 60.9 months in the U.S. versus 65.2 months in Europe. However, reaching a $1 billion valuation involves nearly the same number of funding rounds in both regions: an average of 5.3 in the U.S. and 5.4 in Europe.

In Asia, according to the report, reaching unicorn status requires raising an average of $243 million across 4.8 funding rounds over an average period of 45.7 months. Globally, the average to become a unicorn is $182 million and 59.4 months from the first funding round.

The report reveals that Information Technology (IT) accounts for more than half of all unicorns created since 2005. Healthcare and Financial & Insurance Services follow, though at a much lower volume. It also shows that secondary share sales, IPOs, and trade sales have been the most common exit routes for unicorns, representing nearly 80% of all exits since 2005. Since 2006, 57 unicorns have been written off, falling from valuations above $1 billion to $0.

The Future Challenges of Unicorns

The venture capital landscape has changed over the past 20 years, and its shape for the next 20 years is beginning to take form. The Preqin report notes that secondary markets can provide liquidity when needed. It also raises the possibility that evergreen funds could replace IPOs as a way to ensure long-term value. Moreover, hybrid managers could emerge, with diverse networks to manage risk across asset classes and “even bridge the gap between public and private investments.”

The study emphasizes that private equity has often found ways to adapt. “The shift toward larger growth-stage investments with direct operational involvement, adapting to fewer IPO opportunities and operating with even longer time horizons, will help strengthen venture capital and improve its ability to smooth returns amid changing interest rates and economic downturns,” the report states.

As venture capital adapts, so too will the instruments most influential to its success. Unicorn companies, once mythical and now plentiful, may increasingly approach the realm of private equity. Continuation funds, often focused solely on growth, are just one way that, according to the report, the cultures and practices of venture capital and private equity are converging.

The first unicorn company in Preqin’s Company Intelligence database was Vonage Holdings, a U.S.-based cloud computing platform, which reached a $1.1 billion valuation in May 2005 after a Series E funding round led by Bain Capital Ventures, 3i, and Institutional Venture Partners.

The most recent unicorn, as of June 2025, is Jumbotail Technologies, a retail platform and B2B food and grocery marketplace based in India, founded in 2015. VC investors in its Series D funding round included Artal Asia Pte. Ltd. and SC Ventures.

What to Expect from Central Banks in 2026?

| By Marta Rodriguez | 0 Comentarios

After a 2025 that clearly demonstrated the diverging paths taken by various central banks around the world, all signs point to somewhat more stability in monetary policy in 2026. That said, attention remains on whether the recent arrest of Nicolás Maduro by the United States will have repercussions on oil prices and, consequently, on inflation and the actions of central banks.

Without a doubt, the focus will be on the U.S. Federal Reserve. Its chair, Jerome Powell, reaches the end of his term in April, amid doubts about the future independence of the institution and with a member of the Federal Open Market Committee (FOMC), Lisa Cook, entangled in legal proceedings. “The Fed has many factors at play in 2026. Not only will a new chair take over, but the macroeconomic outlook remains uncertain. The labor market appears to be cooling without collapsing, while inflation remains stable,” notes Bret Kenwell, Market Analyst at eToro in the U.S., who questions whether the U.S. monetary authority “will be able to adopt a dovish tone if these factors persist in 2026, or whether its dual mandate will keep moderate measures in check.”

A similar view is held by Ray Sharma-Ong, Deputy Global Head of Bespoke Multi-Asset Solutions at Aberdeen Investments, who believes that “the Fed is between a rock and a hard place, with inflation remaining high despite a weakening labor market.” This disconnect “has widened the divisions within the Committee.”

That said, following the rate cuts in 2025 and the current context of the institution, “the Fed’s monetary policy is no longer a catalyst for the markets,” according to the expert. The reason is that with federal funds interest rates between 3.5% and 3.75%, the Committee considers that monetary policy is within the effective range of neutrality. Therefore, “the bar for new cuts is very high, implying that the monetary policy outlook is likely to remain static for some time.” As a result, with official interest rates on hold, “we no longer expect a broad-based beta rally in equities; market correlations may decrease, and fundamentals may gain greater importance.”

For Paolo Zanghieri, Senior Economist at Generali AM, part of Generali Investments, the economy continues to enjoy a solid foundation, but downside risks to employment remain more important to the FOMC than upside risks to inflation.

Now, following the December rate cut, “it can now wait for more data before deciding on the extent and pace of further rate cuts.” Here, Zanghieri‘s outlook is clear: the projected path for the official interest rate has not changed since September, with two more cuts of 25 basis points, one next year and another in 2027. “Our forecast of another rate cut next year aligns with what the Fed expects, but we believe the easing will stop there,” he notes, admitting that this forecast would only be modified in terms of timing, with a possible delay of the next cut to mid-year.

Europe
Nachu Chockalingam, Head of Credit at Federated Hermes, highlights the work done by central banks in recent years to reduce global inflation. From this point, she expects official interest rates to fall, but in general, “to remain slightly above pre-pandemic levels, especially in developed market economies.”

Her view is that the Federal Reserve and the Bank of England will continue cutting rates, “but the direction the European Central Bank (ECB) will take, having started to ease policy earlier, is a bit less clear.” Mainly because inflation in the eurozone is nearing the 2% target, “but the outlook remains uncertain due to global trade disputes and geopolitical tensions.”

The expert explains that short-term risks to the interest rate outlook persist, but she believes the situation would have to deteriorate significantly for the ECB to cut rates again in 2026. Some of these downside risks she mentions include any delayed adverse impact from U.S. tariffs, a stronger euro, the impact of Chinese imports, or delays in Germany’s fiscal stimulus. Political unrest in France, within the context of worsening fiscal conditions, is another potential risk, according to Chockalingam.

The Bank of England (BoE) will also generate market attention throughout 2026. David A. Meier, Economist at Julius Baer, expects two rate cuts from the BoE and a wait-and-see approach from Scandinavian monetary authorities. The BoE, the expert recalls, cut rates to 3.75% at its last meeting amid slowing inflation and weak growth but remained cautious about further easing. “We forecast two more cuts in 2026 and maintain a neutral outlook for the pound sterling,” he notes.

Meier also outlines his expectations for the Nordic central banks: Sweden’s Riksbank kept the policy rate at 1.75% at its last meeting, “with outlooks pointing to possible hikes in late 2026, supporting a bullish scenario for the Swedish krona.” Meanwhile, the Norges Bank, keeping rates at 4% due to persistent inflation, “strengthens the Norwegian krone as the highest-yielding G10 currency.”

Japan
Regarding Japan, Álvaro Peró, Fixed Income Investment Director at Capital Group, reveals that reflation continues amid positive economic growth and inflation above target. The expert explains that although the election of the new Prime Minister, Sanae Takaichi—who campaigned on a platform of fiscal stimulus, state investment, and financial repression—has raised market expectations for more flexible policy, the Bank of Japan (BoJ) has reiterated the need for further hikes in a context of yen weakness and reflationary pressures.

This view is shared by Homin Lee, Senior Macro Strategist at Lombard Odier. The expert expects interest rates in Japan to continue rising in 2026. “After having shielded Japan from deflation through years of accommodative monetary policy, we expect the BoJ to welcome signs of reflationary success with two interest rate hikes in 2026, the first likely in January,” he notes.

Latin America
Forecasts also extend to the largest Latin American economy: Brazil. At DWS, they suggest that the Central Bank of Brazil “appears willing to maintain its aggressive stance” and indicate that structural reforms, following next year’s elections, “could help unlock the country’s potential.”

This is the view of Yi Li-Hantzsche, Emerging Markets Analyst at DWS, who acknowledges that so far, Brazil’s central bank has shown an unwavering commitment to bringing inflation back to target, “despite pressure from the government and the close ties between Governor Galípolo and President Lula.” The expert believes that with a constructive electoral outcome and the prospect of credible reforms, “Brazil could finally unlock lower rates without putting its credibility at risk.”