Chilean and Colombian Peso, the Latin American Currencies With the Greatest Resilience

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The Brazilian real and the Colombian peso should be the currencies that show the greatest resilience during the geopolitical tensions in the Middle East, as they are net exporters of oil. Even so, the most notable movement for Ebury is the appreciation of the dollar of between 1% and 4% against the Latin American currencies that they usually cover, “given the shift that has taken place in global markets toward safe-haven assets.”

In its latest report, the firm’s experts highlight that the Chilean peso appears especially vulnerable as it is one of the largest net importers of oil among emerging markets. “In addition, the weight of energy in the national CPI is relatively higher than in other countries,” they add. By contrast, the second key conclusion of the report is that in Peru, local disruptions in the supply of natural gas have further worsened the situation.

The Brazilian real (BRL)

According to Ebury’s report, the Brazilian real has corrected some of its losses, but it has still depreciated by 1.5% against the greenback since the conflict in the Middle East escalated. “As a net exporter of oil, the Brazilian real should be less impacted than other emerging market currencies by the recent rise in oil prices. However, it has not emerged completely unscathed from the generalized flight toward safe-haven assets and currencies such as the dollar,” they note.

As for economic data, which have been completely overshadowed by the geopolitical conflict, Brazil’s fourth-quarter GDP growth came in line with expectations, registering a modest expansion of 0.1% quarter-on-quarter. According to their analysis, this clearly reflects the high interest rates set in Brazil, which they also believe have recently caused some slowdown in the labor market: the unemployment rate rose to 5.4%, although it remains close to historical lows. “Looking ahead, we still believe that Brazil’s central bank will begin its rate-cutting cycle this year, but it may act more cautiously while the conflict in the Middle East persists,” they conclude.

The Chilean peso (CLP)

As indicated in the previously mentioned conclusions of the report, the Chilean peso is one of the currencies most affected by the conflict in the Middle East, and not only at the regional level. “Chile’s position as a net importer of oil, together with the fall in copper prices amid the possibility of weaker global demand, have been the main factors behind the depreciation of the peso, which exceeded 4% last week. Given the risk of an inflationary rebound if the conflict drags on and if oil prices remain elevated, swap markets have drastically adjusted their expectations for rate cuts by the Central Bank of Chile this year,” Ebury argues.

They also highlight that just a few weeks ago markets were pricing in a rate cut at the next meeting with a probability close to 70%; now that figure has fallen to around 25%. “As a result, it is reasonable to anticipate a cautious BCCh at its next Monetary Policy Meeting, despite the recent slowdown in inflation observed in February. As long as geopolitical uncertainty persists and clear signs of de-escalation do not appear, the Chilean peso, like other emerging market currencies, will remain under downward pressure,” the report notes.

The Colombian peso (COP)

In the case of the Colombian peso, Ebury’s analysis indicates that it has also been one of the most resilient currencies in Latin America since the conflict in Iran broke out, as it is a net exporter of oil. That said, the document notes that it has also lost ground against the greenback (just over 1%) amid the generalized flight from risk assets and currencies.

In addition, the parliamentary elections do not appear to have had a significant impact on the exchange rate, with the expected political fragmentation taking place. “Pacto Histórico emerged as the political force with the greatest representation in Congress, while the strong result of Paloma Valencia puts her in a good position to compete with De la Espriella for the right-wing vote. Given the high percentage of undecided voters, the potential outcome of the presidential election continues to generate uncertainty in the local market, which could add a risk premium to the peso,” they note.

The Mexican peso (MXN)

For its part, the Mexican peso has fallen by more than 3% against the greenback since the outbreak of the conflict. According to the report, amid the possibility of higher inflation, markets have stopped pricing in rate cuts by Banxico. “In addition to developments in oil prices and geopolitical tensions, markets will closely monitor the negotiations over the USMCA, which are scheduled to begin next week,” they note.

In part, according to their view, this could be positive news for the Mexican economy, as trade uncertainty could dissipate sooner than expected. However, they believe that the net impact on the economy and the Mexican peso will depend largely on the content of the agreement that is ultimately ratified. In this sense, Ebury’s forecast is clear: additional volatility around the Mexican peso can be expected in the coming weeks.

The Peruvian sol (PEN)

Finally, the report highlights the performance of the Peruvian sol, which has fallen almost 4% since the first attacks by the United States and Israel on Iran, depreciating to levels not seen since late September. It is worth recalling that, as a net importer of oil, Peru is vulnerable to this energy shock.

“Although it started from more favorable inflation levels than other countries, a leak in a gas pipeline in the south of the country is causing a severe shortage, leading to energy rationing across different sectors. A significant rebound in inflation is expected in upcoming readings, which will partially correct once the leak is repaired. This is believed to take approximately two weeks. In this regard, it will be interesting to analyze how the BCRP responds to these developments at this week’s meeting,” Ebury concludes.

The Liquid and the Solid: What Is Happening with Private BDCs in the United States

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Tensions, crisis, a reminder of a structural reality, a turning point, and opportunity: in recent weeks the alternative assets and private credit sector has experienced episodes of lack of immediate liquidity that have led major asset managers to limit capital withdrawals.

This phenomenon does not necessarily imply insolvency, but it does reflect a structural problem in the segment: the difficulty of offering frequent liquidity in vehicles that invest in very illiquid assets, such as direct loans to companies.

There is a “liquidity mismatch,” or as Jaime Cruz, Portfolio Manager Private Debt USA at Fynsa AGF, notes in a recent report: “In simple terms, the market is remembering a structural reality: private credit is not a liquid asset, even though some structures attempt to offer periodic exit windows.”

A new difficulty for investors already saturated with uncertainty

Amid the enormous uncertainty generated by the new war in the Middle East and the chronic instability of public markets, experts are observing these movements that until recently “seemed unlikely,” according to Cruz himself.

For analysts at Apollo Academy (a firm specialized in alternative assets), we are facing a turning point.

During the period roughly between 2010 and 2022, low interest rates, abundant liquidity, and multiple expansion allowed many managers to generate returns without needing to rely heavily on operational value creation. However, the macroeconomic environment has changed structurally, and the sector now faces a scenario in which those factors can no longer sustain the same level of returns. In this context, the future success of private equity will depend on recovering the principles that historically defined the industry: discipline in acquisitions, operational improvement of portfolio companies, and clear strategies to generate liquidity at exit, argue David Sambur, Partner Co-Head of Private Equity and Head of Equity; Matt Nord, Partner Co-Head of Private Equity and Head of Hybrid; and Antoine Munfakh, Partner Deputy Glob, in a report attached at this link.

The Apollo report argues that private equity must return to its roots: “Traditionally, the attractiveness of this asset class was based on managers’ ability to acquire companies with potential for improvement, implement strategic and operational changes, and subsequently monetize that value through an exit. This approach involved active participation in the management of companies, with the objective of improving their efficiency, optimizing their cost structure, driving growth, or redefining their competitive positioning. Because they were not subject to the pressure of quarterly results typical of public markets, companies under private equity ownership could adopt long-term transformation strategies.”

Greater differentiation among asset managers

Experts agree that opportunities in the sector will depend on greater differentiation among asset managers’ strategies.

“Greater competition among managers, together with the return of some banks to certain segments of corporate financing, has begun to put pressure on origination conditions. This has translated into lower origination in some segments and a gradual compression of spreads, particularly in corporate direct lending, where most BDCs operate.

This adjustment is creating an increasingly clear differentiation within the universe of private credit. While many BDCs compete in the corporate direct lending segment, there are other areas of private credit where competition remains significantly lower,” says Jaime Cruz, Portfolio Manager Private Debt USA at Fynsa AGF.

In particular, financing backed by real assets — such as asset-backed lending and real estate financing — continues to offer attractive spreads and more defensive structures, with origination dynamics that remain favorable, the expert adds.

“For those investing with a long-term horizon, this dynamic is not necessarily negative. In fact, it can strengthen the ecosystem. When speculative flows decrease and the capital that remains is truly patient, managers can focus on what truly generates value: originating quality credit, structuring solid transactions, and capturing attractive spreads. In that sense, what is happening today with private BDCs is not a crisis, but a natural transition in a market that has grown rapidly over the past decade. And as often happens in financial markets, periods of adjustment are also those that ultimately consolidate long-term opportunities,” concludes Cruz.

Bond Market: An Unusual Behavior to Watch

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Rising oil prices and adjustments in global equity markets are capturing investors’ attention; however, investment firms are urging investors to watch what is happening in the fixed income market, especially with bonds. Since the start of the war between the U.S. and Iran at the end of February, the bond market has behaved in an unusual way for a geopolitical conflict.

According to experts, it is striking that instead of clearly acting as a safe haven, bonds have experienced selling pressure and their yields have risen. For example, the yield on the 10-year U.S. Treasury exceeded 4%, driven by rising oil prices and inflation expectations. Normally, during geopolitical episodes there is a “flight to quality,” meaning investors buy sovereign bonds as safe-haven assets. However, this time the opposite has happened because inflation risk has weighed more heavily than the safe-haven effect. Some analysts have even noted that the bond market “is not functioning as a safe haven” in this episode.

Bond Market Behavior

“In the case of sovereign bonds, the most common pattern during periods of geopolitical tension has been a decline in yields due to demand for safe-haven assets. This was the initial reaction following the announcement of the military operation. However, yields subsequently rose throughout the week. With the exception of Japan, the main government debt markets have experienced a bear flattening so far this month, with short-term yields showing significantly worse performance. The so-called ‘bond vigilantes’ could argue that this reflects the increasingly fragile state of public balance sheets, given the high level of debt and ongoing fiscal expansion, which could undermine the traditional role of sovereign bonds as a store of value during periods of global uncertainty,” explain experts at Muzinich & Co.

Daniel Loughney, Head of Fixed Income at Mediolanum International Funds (MIFL), agrees that, so far, sovereign debt has shown the weakest performance, as inflation concerns have led to the dismantling of expectations for interest rate cuts. “In fact, the ECB is now expected to tighten monetary policy by around 50 basis points. As a result, short-term bonds have been the most affected, while longer-maturity bonds have suffered less,” he notes.

In the view of Luke Hickmore, Chief Investment Officer for Fixed Income at Aberdeen, the reason for this behavior is that the bond market is highly focused on the problems that could arise from rising hydrocarbon prices, particularly the impact of natural gas prices in Europe and the United Kingdom. “U.K. government bonds have performed very poorly during this period, with the yield on 10-year bonds rising by around 0.5% during this conflict, and shorter-dated bonds are now moving to price in an interest rate hike by the Bank of England in June.”

For their part, Adam Hetts, Global Head of Multi-Asset, and Oliver Blackbourn, Portfolio Manager at Janus Henderson, explain that concerns about rising European inflation—or simply prolonged stickiness in the United States—would explain why bond yields have increased. “Yields on U.S. Treasury bonds have risen as markets have priced out one of the interest rate cuts by the U.S. Federal Reserve that had been expected for the end of the year. Yields on 10-year Treasuries have moved less than their European counterparts, as Friday’s U.S. employment figures helped offset part of the upward pressure on yields stemming from expected inflation,” they note.

A Look at the Credit Market

In contrast, since the conflict between the U.S. and Iran began, investment grade credit has not significantly reflected economic tensions in prices. According to market reports, spreads have moved slightly but continue to reflect the excellent fundamental quality of most large companies in this environment.

“That is likely where the risk lies in the coming weeks: if oil and gas supply issues persist, which have a lasting negative impact on corporate quality, corporate credit is likely to underperform expectations. In recent months we have favored higher quality in credit markets, reducing risk and holding more cash than we normally would. It is not yet time to put that cash to work,” explains Hickmore.

Muzinich & Co acknowledges that total returns in credit markets are lower so far this month, although, interestingly, high yield has slightly outperformed investment grade credit. “In fact, a European investor positioned in U.S. high yield without currency hedging would probably be quite satisfied with that investment decision so far this month.” As for riskier assets, the U.S. asset manager expects credit spreads to widen.

The Conclusions

After this quick analysis of both markets, according to Luke Hickmore, Chief Investment Officer for Fixed Income at Aberdeen, what is happening is clear: “The increase in government bond yields is doing part of the heavy lifting and has prevented credit spreads from widening as much as we might have expected before the conflict began.”

Despite these unusual dynamics, Loughney argues in favor of staying invested and says conservative investors should not overreact. “Much of the downside risk has already been priced in under the assumption of a prolonged conflict. Any sign of resolution in the coming week could trigger some reversal of last week’s moves, from which investors could benefit,” he says.

Investment firms argue that the escalation of geopolitical risks has occurred at a time when inflationary pressures have been steadily moderating worldwide. As a result, they explain, over the past 12 months there have been more signs that fixed income can act as a counterweight to weakness in equity markets. “Central banks are likely to look through the brief spike in energy and commodity prices in general. However, a prolonged conflict that increases the likelihood of a sustained rise in oil prices will raise concerns about increasingly entrenched inflation. It is this secondary effect—if inflation expectations become unanchored—that could worry central banks. For now, we see some short-term upside risk for yields, but still within the recent trading range. Recent developments reiterate the need to actively manage fixed income portfolios, not only to take advantage of opportunities but also to protect against downside risks. As always, diversification remains key,” argues James Ringer, fund manager at Schroders.

Why Do We Still Have to Talk About Kevin Warsh?

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One week before the meeting of the U.S. Federal Reserve (Fed), and with attention focused on the effect that rising oil prices may have on inflation, it is necessary to bring the name of Kevin Warsh back into focus if we want to analyze what we can expect from U.S. monetary policy this year.

Warsh has been noted for his extensive experience, credibility, and strong reputation in the markets, as well as his leadership capacity and firm stance on inflation. In terms of monetary policy, experts consider him hawkish, as he has openly supported interest rate cuts under certain circumstances, although they add that he has a flexible attitude.

According to Raphael Olszyna-Marzys, international economist at J. Safra Sarasin Sustainable AM, the reasons why he was chosen are clear: “He is seen as politically loyal. In addition, he is the son-in-law of Ronald Lauder, a close friend and ally of Trump for many years. He is also a longstanding critic of what he considers the Fed’s overreach, such as financial regulation, consumer protection, the focus on inequality, and quantitative easing (QE). Finally, he has a reputation as a hawk due to his public opposition to the second round of QE, which ultimately led him to resign as a Fed governor in 2011. All of this should give him some credibility with the markets and potentially greater influence within the FOMC than other candidates.”

Robeco: A Genuine “Hawk”?

For experts at Robeco, although he has been portrayed as an “inflation hawk,” some nuances are necessary in the current context. They recall that during his time as a Federal Reserve governor, Warsh expressed concern about the inflationary risks stemming from quantitative easing (QE) and became one of its most outspoken internal critics. “Today we mainly know QE as a policy that has expanded the Fed’s balance sheet. For that reason, it is not surprising that, in an opinion article published in The Wall Street Journal in November 2025, he argued that ‘the Fed’s swollen balance sheet… can be significantly reduced.’ This stance has reinforced his recent portrayal as an ‘inflation hawk,’” they acknowledge.

However, the European asset manager believes that the image of Kevin Warsh as a “hawk” is exaggerated and expects him to support another reduction in official interest rates by June, which would likely be his first meeting as chairman. “In reality, his views suggest room for lower interest rates, not higher ones, and his goal of reducing the Fed’s balance sheet may prove to be more of a desire than a reality. As for his view that the Fed’s balance sheet may be excessively large, we believe that, in practice, it will be difficult to reduce it significantly without regulatory adjustments to the ‘abundant reserves’ regime of the banking system,” they argue.

MFS IM: Non-Traditional Monetary Easing

Regarding what to expect from him, Benoit Anne, Senior Managing Director of the Strategy and Insights Group at MFS Investment Management, believes that the “new Fed chairman” thinks there is room for monetary policy easing, but perhaps not in the most traditional way. “Warsh believes that the United States is experiencing a productivity miracle that will not only boost the country’s long-term growth potential but will also generate significant disinflationary pressures. As inflation moves lower, the Fed will have more room to continue cutting rates, which will please the White House. However, this is where a possible contradiction arises,” notes Anne.

According to the asset manager’s chief economist, Erik Weisman, a trajectory of stronger growth driven by productivity would normally tend to be associated with an increase in the neutral rate. This means that, on this basis, the room for maneuver for the Fed’s monetary policy in that macroeconomic scenario would be smaller, not greater, in the long term.

“Turning to Kevin Warsh’s view of the Fed’s balance sheet, it is clear to everyone that the new Fed chairman favors a certain degree of moderation. But if implemented, a reduction of the balance sheet could affect liquidity and interest rate volatility in a way that might be seen as contradictory to the initial goal of lowering rates,” adds Anne.

Something for Everyone, According to Wellington Management

At Wellington Management, they believe that Warsh could take a step toward reducing the Fed’s power with respect to its current broad mandate and could also play a key role in changing the Fed’s structure and in closer collaboration with the Treasury in managing the Fed’s balance sheet.

“The level of control that the Trump administration has over interest rates, as well as broader regulatory and supervisory decisions, will depend on the final composition of the Fed’s Board, including whether Jerome Powell decides to remain in his position. It will take some time before these decisions are made and before they matter to the markets, but in the medium term I expect them to be significant for the conduct of both monetary and broader policies,” explains Juhi Dhawan, macro strategist at Wellington Management.

Finally, the expert adds that the choice of Warsh, who has advocated restrictive monetary policies throughout his career, should somewhat ease concerns that managing inflation might take a back seat to political priorities. “Markets will be more willing to believe that economic data will dictate how monetary policy is conducted, which should stabilize the dollar from the perspective of devaluation risk,” Dhawan acknowledges.

Snowden Lane Partners Adds MSCI Wealth Manager to Its Advisory Ecosystem

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Snowden Lane Partners has announced that it will integrate MSCI Wealth Manager into its advisory ecosystem. It is a technological platform focused on portfolio management for the analysis of public and private assets, as well as tax optimization and the ability for advisors to generate responses for clients.

Specifically, MSCI Wealth Manager was designed to support advisors’ efforts when providing personalized financial advice, quickly showing the risks of each portfolio, as it is based on modeling technology that identifies those assets that deviate from clients’ investment objectives. The platform also integrates risk analysis with proposal-generation and model management tools, which supports a unified advisory experience.

Strategic Vision

In line with Snowden Lane’s commitment to offering comprehensive, personalized, and client-focused advice that supports that growth, the firm adopted MSCI Wealth Manager to equip its team of advisors with tools to differentiate their clients’ experience; compare, align, and customize clients’ portfolios around recommended asset allocations; identify new opportunities; and analyze portfolio data from the investment statements of current and prospective clients, which can be uploaded directly to the platform.

According to Snowden Lane Partners, the alliance follows a successful 2025, during which the firm expanded its capabilities in alternative assets, added senior profiles to further strengthen business development and talent acquisition operations, and continued expanding its advisory team, with new offices in the northeastern and southeastern United States.

“We are delighted to partner with MSCI, as we share a dedication to providing clients with best-in-class tools that enhance their advisory experience. Equally important is that our advisors now have a broader set of tools to continue putting our values into practice, offering clients transparent and individualized solutions for their specific needs. As our firm continues to grow, continuing to reinvest in technological capabilities that enhance the experience of our advisors and clients is essential, and this alliance with MSCI is the most recent example of that,” said Alison Burkett, Executive Vice President and Head of Corporate Development at Snowden Lane Partners.

For his part, Alex Kokolis, Global Head of Wealth at MSCI, said: “MSCI Wealth and Snowden Lane share a vision of advancing portfolio management technology to better respond to the evolving needs of end investors. We are proud to provide Snowden Lane’s advisors with the tools they need to align their clients’ portfolios with their goals, values, and evolving view of risk in today’s complex market environment. MSCI Wealth Manager can help Snowden Lane manage their clients’ specific investment needs efficiently, consistently, transparently, and with confidence.”

PwC: The Rapid Expansion of ETFs in the United States “Shows No Signs of Slowing”

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Following record net inflows in 2025, assets under management in U.S. ETFs rose to $13.4 trillion, an increase of 30%. “And this rapid expansion shows no signs of slowing,” according to PwC’s annual ETF 2030 Survey. More than a third of U.S. respondents expect assets managed by American ETFs to more than double and reach $25 trillion or more by June 2030, up from $11.6 trillion in June 2025.

“In a rapidly evolving U.S. market, active ETFs are one of the engines of growth,” the study notes. While active ETFs represent 11% of the U.S. ETF market, 83% of the new ETFs launched in the country last year fell into this category. Moreover, nearly three quarters of U.S. respondents expect demand for active ETFs to increase over the next two or three years.

The combination of rapidly rising investor demand and a favorable regulatory environment led to a record 110 digital asset ETF launches in 2025. More than a third of respondents plan to launch more ETFs of this type over the next 18 months.

U.S. respondents also point to opportunities for ETF share classes following approval by the Securities and Exchange Commission (SEC). According to the study, ETF managers will need to address various business, governance, and operational considerations to fully capture the potential of ETF share classes.

Global Figures

Assets under management in ETFs worldwide reached $19.5 trillion in 2025, up from $14.6 trillion in 2024, representing an annual growth rate of 33%, driven by strong performance in equity and bond markets. The global ETF industry also benefited from significant capital inflows, reaching a record $2.1 trillion, nearly 3.5 times higher than those of mutual funds.

And this growth trend could continue. According to the survey, more than 80% of respondents believe that investors’ preference for ETFs over other investment products will have a significant impact on the sector’s growth over the next two or three years.

In this regard, more than half of the participants in the study point to the conversion of other products, including mutual funds and separate accounts, into ETFs as a key driver of growth. More than a third expect a significant impact from the growth of ETF share classes added to existing mutual funds, where regulators allow it.

More than a third of respondents expect global ETF assets under management to reach $35 trillion or more by June 2030, more than double the assets managed by ETFs worldwide in June 2025. Nearly 70% do not rule out that the figure could reach at least $30 trillion by the end of the decade.

“We Will End Up Having Fewer and Fewer Government Bonds in Our Portfolios Because We Will Consider Them Increasingly Risky Assets”

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Photo courtesyPaul Jackson, Global Head of Asset Allocation Research at Invesco for EMEA.

Paul Jackson, Global Head of Asset Allocation Research at Invesco for EMEA, recently outlined his outlook and favorite assets for the year during a meeting held in Miami, as part of the presentation of the partnership between Invesco and LarrainVial.

Jackson expects 2026 to be “just as good” as 2025 and believes that the strong market performance this year will be driven, first, by the continued easing of monetary policy by several central banks, including the Federal Reserve, for which he forecasts between two and three interest rate cuts in 2026. According to Jackson, the Bank of England will follow a similar path. This easing, “after a couple of years of very aggressive rate cuts by almost all central banks around the world,” has led to an acceleration in money supply and “normally this is associated with stronger economic growth and perhaps higher inflation over the long term.”

There are exceptions to this scenario. Here Jackson points to the Bank of Japan, which will raise rates for some time. He also mentions Australia, following its recent rate hike. However, this will not prevent a boost to global economic growth.

Another factor that will accelerate economies is the increase in real wages across most regions, which “should boost consumer spending,” especially in areas such as Europe, where savings rates are “unusually high.” In the United States, that momentum will come from wage inflation exceeding price inflation.

Third, economic growth will also be supported by selective fiscal stimulus. Jackson mentions the expected increase in military spending in many European countries, alongside Germany’s “significant” infrastructure spending program. He also points to Sweden which, given its proximity to Russia, “feels the need to increase military spending.” Japan is an “interesting” case for Jackson, as Prime Minister Sanei Takeuchi is “very interested” in increasing fiscal stimulus in Japan.

Asset Allocation for the Year

Jackson notes that, in general, stronger economic growth benefits cyclical assets such as industrial commodities and equities, as well as higher-risk assets overall. However, he sees factors that could prove destabilizing.

The main one is the U.S. midterm elections, which “usually trigger a shift against the president’s party.” The consensus view is that Democrats will win the House of Representatives, but not the Senate, although Jackson has the “slight suspicion” that Democrats could win both chambers. “It will be difficult, because they need to gain four seats from the 22 Republican seats up for election, but I suspect they could achieve it.”

He also sees few opportunities in duration. Jackson points to the numbers: short-duration assets still offer low yields, while longer-duration assets—such as government bonds, investment-grade and high-yield bonds, as well as equities and real estate—offer returns similar to or even below historical averages.

For example, he expects the yield on the 10-year U.S. Treasury to rise to at least 4.3% by the end of the year. “That’s why when I think about government bonds, investment grade and high yield, my stance is, at best, neutral, with a bias toward underweight.” Jackson prefers assets such as leveraged loans and believes AAA-rated CLOs “are a cash-like asset, but enhanced,” while generating the same return as high-yield bonds “but with much lower volatility.”

Regarding equity markets, he holds a very underweight position in the U.S. market, as he considers it “too expensive.” One alternative would be “to buy a nuclear-energy-weighted index, or focus on the banking sector.”

Jackson acknowledges that several Latin American markets offer value, although within global equities he particularly highlights China, which remains “cheaper than usual” relative to its historical average and “much cheaper” than the United States. His conviction is strong: “I have maximum exposure to Chinese equities,” he said. In fact, he is overweight emerging markets, Europe, Japan, and the United Kingdom, which offer “interesting returns.”

He is also interested in industrial metals—copper, aluminum, lead, etc.—because they are sensitive to the economic cycle. Even energy appeals to him, “where valuations are more reasonable,” and which should benefit from his scenario of an expansionary economic cycle.

In currencies, he highlights the Japanese yen, which he believes “is very cheap.” The Bank of Japan “needs to raise rates,” and as long as it continues to do so while the Fed eases monetary policy, “the yen will strengthen considerably.” As a complement, in Japan it is now possible “to obtain yields above 3.5% on 30- or 40-year bonds in a very cheap currency.”

Risks to Watch

Jackson believes it is always important to consider what could go wrong. The first obvious risk is being wrong about the economic cycle—namely a slowdown or mild recession. In that case, defensive instruments would be needed: “Bank loans and CLOs would work, but government bonds would also be very good.”

The second risk would be a rebound in inflation, which “is no longer declining steadily around the world.” He acknowledges that many investors believe gold could be useful in those circumstances, although it does not always work as such.

The third risk would be the implications of Kevin Walsh being appointed chair of the Federal Reserve. “Walsh’s track record is not that moderate,” Jackson notes, recalling that recent statements by the new Fed chair contain elements suggesting the Federal Reserve could be more restrictive than Donald Trump would like. “We could face some unpleasant surprises,” he said.

Fourth is the concentration of the U.S. equity market, although Jackson clarifies that he sees this factor as “a risk not only for the U.S. market but also for global equity markets.”

The fifth risk he highlights is a resurgence of debt problems. “If governments do not do the right thing, we will probably end up talking about the return of the gold standard, and then we could become very optimistic about gold. My gold standard calculation suggests gold should be at $9,300,” the expert predicted. Strategically, he concludes, over time “we will end up having fewer and fewer government bonds in our portfolios because we will consider them increasingly risky assets.”

Aristotle’s List of 10 Surprises for 2026

Jackson also used the Miami event to present his “Aristotle List,” a compilation of ten major surprises for the year inspired by the list Byron Wee used to publish at Morgan Stanley. In a relaxed setting, the expert shared ideas that diverge from market consensus and that, if confirmed, could deliver strong gains for investors.

The first prediction refers to Democrats controlling both chambers of Congress after the midterm elections. Next comes the possibility that the Russell 3000 index will outperform the group of the Magnificent Seven. The podium is completed by the prediction that the yen will appreciate to 140 yen per dollar, from more than 150 currently.

The list also includes the expectation that the yield on the 30-year UK government bond will end the year below its U.S. counterpart, and that Argentine bonds will outperform global indices. In addition, European CO₂ allowances could surge above $100, compared with around $70 currently.

He also expressed confidence that the Kenya stock market will perform well for a third consecutive year. “It’s a small market and I doubt anyone has analyzed it,” Jackson said. Each year he tries to highlight a frontier market “where valuations are really attractive and fundamentals remain good. And I think Kenya is the ideal candidate.”

He also predicts that gold could fall below $3,500. “Gold is expensive. It is trading between five and six standard deviations above its historical real value. Everyone loves a rising asset, but I have the slight suspicion that it won’t last the whole year,” he concluded.

Outside the economic sphere, Jackson sees it as likely that UK Prime Minister Keir Starmer will still be in office by the end of 2026. Finally, his sporting prediction—after correctly forecasting last year that Europe would beat the United States in the Ryder Cup—is that Spain and England will play in the final of the FIFA World Cup hosted by the United States, Mexico, and Panama. England will reach the final after defeating Argentina in the semifinals, but Jackson’s prediction is that Spain will lift the trophy.

Jackson’s final message to attendees at the event was an invitation to be happy: “Academic studies show that being kind to others makes you feel better. So don’t be selfish, and don’t trust anyone who is addicted,” he said.

The Search for Alternatives Capabilities Fuels M&A in Asset Management

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Although not yet at the pace seen a few years ago, consolidation in the financial services industry, including the asset and wealth management businesses, has continued to show dynamism in the sector. The boom in alternative assets, in particular, has inspired companies to turn to the M&A market, as the desire to expand their investment capabilities in private markets has left its mark on asset managers.

During 2025, figures from McKinsey & Company show that transactions between asset and wealth managers reached 156, totaling $113 billion. This represents a 15% increase compared with 2024, but it is still a slower pace than recorded in the past, according to the report Global M&A Trends, signed by senior partners Jake Henry and Mieke Van Oostende.

According to the consulting firm’s analysis of the financial services industry, merger and acquisition activity in the world of asset and wealth management is being redirected toward businesses focused on investment capabilities.

This, they added, is especially true for deals that strengthen expertise in alternative assets. “Managers are targeting firms that give them an edge in private markets, real assets, or advanced technology,” the consultancy said on the matter.

From S&P Global Ratings they agree with the diagnosis, highlighting that the growing appetite for private credit strategies—a segment that is increasingly gaining ground in the alternatives space—and other alternative markets has led traditional managers to acquire additional investment capabilities.

Adding Capabilities

The objective, the rating agency outlined in a document on its outlook for the asset management sector in 2026, is to grow AUM, increase strategy diversification, and add publicly listed permanent capital. “The strategies being sought include private credit, infrastructure, and secondaries, among others,” a group of analysts from the firm wrote in their report.

In that sense, the rating agency highlighted a series of deals involving some well-known names from the world of traditional asset managers.

BlackRock, for example, announced in 2024 the purchase of the private credit firm HPS Investment Partners, the specialized house Global Infrastructure Partners, and the well-known data provider Preqin.

That same year, Janus Henderson Group announced the acquisition of Victory Park Capital Advisors, which invests in private credit. To strengthen this same asset class, Franklin Resources reported the purchase of Apera Asset Management the following year.

Another major buyer, as S&P Global Ratings listed, has been Affiliated Managers Group (AMG). During the past year, they indicated, the investment firm strengthened its capabilities in private equity with the purchase of Montefiore Investment; in infrastructure and energy transition, with Qualitas Energy; in logistics properties, with NorthBridge Partners; and in multi-strategy hedge investments, with the hedge fund Verition Fund Management.

One of the arguments in favor of this greater consolidation in the industry is related to the diversification of strategies within asset managers and the role it plays.

The Art of Diversifying

Some traditional managers are growing their alternatives offering, which could support revenue growth and visibility. Others are expanding their product offerings to offset outflows from strategies that are no longer in favor, according to S&P Global Ratings. In the opinion of its team of analysts, “more diversified firms are better positioned to retain their AUM as investment strategies become popular and unpopular.”

In addition, observers of the financial services sector point out that these asset classes bring with them a more favorable dynamic in corporate results.

As emphasized by the financial-sector specialist firm Crisil Coalition Greenwich, in a report corresponding to the first quarter of 2026, the mantra for asset managers during this year will be that “not all AUM is equal.”

In the past, they indicated, asset management firms have focused on capturing investor demand and boosting their own results through the launch of active ETFs and other public products, with fees that fall between index funds and actively managed vehicles. For the consultancy, this trend will continue in 2026, but more focused on alternatives, as it is more profitable for companies.

Although passive assets represent almost 30% of the asset management industry’s AUM, their figures show that they contribute only 7% of the sector’s revenue. By contrast, alternatives account for just 18% of AUM but generate 57% of the sector’s revenue. “These statistics clearly show that some dollars under management are worth much more than others when it comes to generating revenue,” the specialists at Crisil Coalition Greenwich said.

Diversification, Defensive Strategies, And Advisory: The Three Needs Identified by Advisors

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Equity markets have started 2026 with significant volatility. According to Mary Ann Bartels, CIO at Sanctuary Wealth, this reflects the typical turbulence associated with midterm election years, which are usually marked by corrections followed by strong rebounds. Despite the challenges, the S&P 500 aligns with historical patterns, supporting an optimistic outlook and emphasizing the importance of diversification.

In the view of Marlen Lopez, Senior Wealth Advisor and Founding Partner at Excelsis Global Private Wealth, for Latin American investors the main market drivers for this year include currency performance, commodity prices, and global exposure. “The U.S. dollar has weakened for three years while global reserve currencies such as the euro and the yen have strengthened. This has allowed them to benefit from greater exposure to non-dollar-denominated assets, mitigating risks arising from local currency volatility and taking advantage of foreign exchange opportunities. Maintaining a well-diversified portfolio across regions, sectors, and asset classes remains crucial to effectively manage risks and capitalize on global opportunities in a market that is increasingly stable but also more segmented,” Lopez says.

As a result, clients have adopted a diversified approach to mitigate market volatility and have leaned toward defensive strategies in search of stability, including investments in less volatile sectors such as Consumer Staples and Utilities, which offer stable returns. “We have seen the implementation of high-dividend equity strategies in uncertain markets and international diversification, especially in developed and emerging markets, which posted strong returns in 2025. Positioning is leaning toward taking advantage of corrections as buying opportunities, following the bullish projection for the S&P 500 in 2026,” she notes.

Compared with other years, Lopez has detected significant changes in asset allocation. In particular, she observes a greater emphasis on international equities and stronger demand for mixed fixed income. “The entry of the MSCI EAFE and Japan’s TOPIX into bull markets has led investors to increase global exposure to capture the superior returns recorded in 2025. Meanwhile, in fixed income, despite the mixed performance of the domestic bond market, high-grade investment assets continue to attract interest due to their currently competitive yields,” she says. She also acknowledges an increase in the weight of metals and commodities, as well as an adjustment in positions in technology.

EM, ETFs, and Alternatives

So far, Lopez has explained how investors have been feeling and how they have moved their portfolios, but her analysis goes a step further. She explains that diversification in developed markets such as Japan and in emerging markets continues to be a priority for investors due to the strong projected gains. “The growing need to mitigate concentrated risks has also led to greater adoption of strategies that include exposure to foreign currencies such as the euro, in addition to the U.S. dollar, expanding currency hedging within portfolios.”

On the other hand, she highlights that demand for ETFs will continue to grow in 2026 thanks to their ability to provide diversified access to specific sectors and global strategies while optimizing costs. “Offshore ETFs that trade in the International Quotation System (SIC) continue to be an attractive resource for Mexican investors, as they offer unique tax advantages and allow exposure to foreign currencies such as the euro (EUR) and the yen (JPY), along with USD, expanding flexibility and return potential in diversified portfolios,” she notes.

Beyond these trends, the expert from Excelsis Global Private Wealth makes it clear that the renewed interest in alternative assets as a source of diversification and protection against volatility has not been a one-off phenomenon. According to her, the most prominent assets and strategies are private credit, infrastructure, and hedge funds.

Filtering the Noise

Beyond asset allocation, what role are financial advisors playing? According to the team at Klosters, advisors have gained weight as “translators of noise.” “The market speaks in a language of algorithms and alarmist headlines, and our job is to translate that into our clients’ objectives. We don’t just report returns. We focus our support on managing expectations. In an overinformed world, our value is saying ‘this is 24-hour noise’ vs. ‘this is a structural change that affects your wealth,’” they explain.

Fernando de Frutos, CIO of Boreal Capital Management, goes a step further and notes that rather than “translators,” advisors have become a “filter” in the face of unlimited access to information and investor saturation. “The challenge is no longer accessing data, but distinguishing signal from noise,” Frutos says. When acting as a “filter,” he starts from the premise that the current geopolitical situation is more volatile than it was 10 or 20 years ago, but not necessarily more than it was 40 or 50 years ago during the Cold War—or even a century ago. “Many comparisons are made with the so-called ‘Pax Americana,’ which reached its peak in the 1990s after the fall of the Berlin Wall, when China was just beginning its economic and military rise. It is worth keeping perspective: that period was probably a historical exception, not the norm,” Frutos recalls.

It is nothing new that advisors have gone through different market events and shocks, but as pointed out by Grey Capital, what matters is putting what has been learned at the service of investors. “The lesson has been consistent: the wealth portfolios that navigate change best are not those that react the fastest, but those that are best structured and governed. In complex contexts, discipline and perspective are more valuable than speed. Every crisis teaches the same thing: those who have structure can wait; those who don’t are forced to react, and that is a major risk,” says Catherine Ruz Parada, partner at Grey Capital Latam.

The Guide to the Women Leading the Asset Management Industry

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There is limited research on the weight and presence of women in senior leadership roles within the asset and wealth management industry. However, one of the few recent data points available, published by Heidrick & Struggles, estimates that among the world’s 50 largest asset managers, only 20% of leadership positions are held by women. Even more striking, only 3% of the CEOs at these firms are women.

To mark International Women’s Day, Funds Society turns the spotlight on that 3%, offering a brief guide to the firms where women are leading companies in the asset and wealth management industry, as well as an overview of their professional careers.

Abigail Johnson

President and CEO of Fidelity Investments since 2014 (U.S.). She is responsible for the executive leadership of the firm’s corporate operations and administrative functions, as well as all of the company’s diversified business units, including asset management, retail and institutional brokerage, and workplace retirement and benefits services. She was named President in September 2013, assumed the role of Chief Executive Officer in October 2014, and became Chair of the Board in December 2016. Johnson earned a degree in Art History from Hobart and William Smith Colleges in 1984 and an MBA from Harvard Business School in 1988. She is also a member of the Board of Dean’s Advisors at Harvard Business School and of the Corporation of the Massachusetts Institute of Technology.

Ariane de Rothschild

CEO of Edmond de Rothschild (Europe). Since 2023, Ariane de Rothschild, who was born in San Salvador, has spent much of her life between Latin America, Europe, and Africa. She began her career in New York on the trading desk of Société Générale. In 1997, Ariane de Rothschild took charge of the family’s non-banking activities and consolidated them under the Edmond de Rothschild Héritage brand. She significantly modernized and expanded the group’s wine and hospitality businesses, continuing a long-standing tradition. In 2006, Ariane de Rothschild joined the Board of Directors of Edmond de Rothschild Holding, and in 2013 she transformed the family’s banking activities by bringing them together under a single brand: Edmond de Rothschild. Under her leadership, the group has expanded its offering, strengthened its position as a 100% family-owned investment firm, and achieved both strong economic success and a deep cultural transformation.

Catherine D. Wood

CEO, Founder, and Chief Investment Officer of ARK Invest (U.S.). Cathie Wood registered ARK Investment Management LLC (“ARK”) as an investment advisor with the U.S. Securities and Exchange Commission in January 2014. As Chief Investment Officer and portfolio manager, Cathie Wood led the development of ARK’s investment philosophy and approach and is ultimately responsible for the firm’s investment decisions. Before founding ARK, Cathie Wood spent twelve years at AllianceBernstein as Chief Investment Officer of Global Thematic Strategies, where she managed more than 5 billion dollars. She joined Alliance Capital from Tupelo Capital Management, a hedge fund she co-founded that managed approximately 800 million dollars in global thematic strategies in 2000. Prior to her time at Tupelo Capital, she spent 18 years at Jennison Associates LLC as Chief Economist, Equity Research Analyst, Portfolio Manager, and Director. She began her career in Los Angeles, California, at The Capital Group as an Assistant Economist. Cathie Wood graduated with honors in Finance and Economics from the University of Southern California in 1981.

Jasna Ofak

CEO and Chair of the Executive Committee of Swisscanto Asset Management International S.A. (Europe). In her role, she leads the firm’s strategy and international development, offering investment solutions to institutional clients and global distributors through its European hub in Luxembourg. As CEO, Ofak leads the executive team responsible for operations, risk management, compliance, and the development of the asset manager’s international business, supporting the expansion of its investment solutions across Europe and other markets.

Jean Hynes

CEO of Wellington Management (U.S.). She oversees nearly 3,000 employees across 16 offices in North America, Europe, and Asia-Pacific (APAC). Her strategic priorities include the firm’s globalization, advancing diversity, equity, and inclusion, integrating technology across the business, and positioning the company for the future of active management. Over the course of nearly 30 years at Wellington, Jean Hynes has analyzed the pharmaceutical and biotechnology sectors, and has also served as a health care sector portfolio manager and leader of the Health Care team. She is one of five female CEOs among the world’s 20 largest asset managers and has received multiple industry awards. Since 2014, Jean Hynes has been one of the firm’s three managing partners, jointly responsible for the governance of Wellington Management. She is based in the firm’s Boston office.

Jenny Johnson

CEO of Franklin Templeton (U.S.). Over a career spanning more than 35 years, Jenny Johnson has held leadership roles across all major divisions of the firm’s business, including investment management, distribution, technology, operations, and wealth management, before becoming Chief Executive Officer in February 2020. In recent years, she has led the evolution of the firm’s business, further diversifying its investment capabilities and client solutions through strategic acquisitions and key investments. She has also been included for four consecutive years in Forbes’ list of the “World’s 100 Most Powerful Women” and has appeared every year since 2020 in Barron’s list of the “100 Most Influential Women in U.S. Finance.” In 2024, the Committee for Economic Development, the public policy center of The Conference Board, awarded her the Distinguished Leadership Award. Johnson holds a B.A. in Economics from the University of California, Davis.

Karin van Baardwijk

CEO of Robeco (Europe). Karin van Baardwijk is Chief Executive Officer of Robeco and Chair of the Executive Committee. She previously served as Deputy CEO, Chief Operating Officer, Head of Global Information Services, and Head of Operational Risk Management at Robeco.

Karin van Baardwijk began her career in the financial sector in 2004 at Atos Consulting. She holds a master’s degree in Business Economics and a master’s degree in Corporate Law from Utrecht University.

Kate Burke

CEO of Allspring Global Investments (U.S.). In addition to serving as CEO, Kate Burke is a member of the Board of Directors of Allspring Global Investments. Prior to her current role, she served as President of Allspring after joining the firm in September 2023. She brings extensive industry experience spanning many aspects of the asset management business. Kate Burke joined Allspring from AllianceBernstein, where she most recently served as Chief Operating Officer and Chief Financial Officer. Before that, she was Head of Bernstein Private Wealth and Chief Administrative Officer. She has also served as the firm’s Chief Human Capital Officer and Chief Talent Officer. Kate Burke currently serves on the Board of Directors of the College of the Holy Cross and Cheekwood Estate & Gardens, where she is also a member of the executive committee. She holds a degree in Economics from the College of the Holy Cross and an MBA from the Kellogg School of Management at Northwestern University.

Mary Callahan Erdoes

CEO of the Asset & Wealth Management division at JPMorgan Chase (U.S.). Since joining the firm 30 years ago, Mary Callahan Erdoes has held several leadership roles within Asset & Wealth Management before becoming its CEO in 2009 and joining the JPMorgan Chase Operating Committee, the firm’s highest leadership body. Mary Callahan Erdoes holds a degree in Mathematics from Georgetown University. She is a member of the Global Advisory Council at Harvard University, where she earned her MBA, as well as a member of the Board of Harvard Management Company and the U.S.-China Business Council. Erdoes lives in New York City and has three daughters.

Mellody Hobson

Co-CEO and Chair of Ariel Investment Trust (U.S.). As Co-CEO, Mellody Hobson is responsible for the management, strategic planning, and growth of all areas of Ariel. She also chairs the Board of Directors of Ariel Investments’ publicly traded mutual funds. Before being named Co-CEO, Mellody Hobson served for nearly two decades as President of Ariel. In 2025, she founded Project Level® to help change the landscape of women’s sports. Mellody Hobson also co-founded Ariel Alternatives, LLC in 2021 and its first private equity fund, Project Black®. In addition to Ariel, she serves as a director of JPMorgan Chase and is former Chair of Starbucks Corporation. Mellody Hobson was also a long-time board member of Estée Lauder Companies and served as Chair of DreamWorks Animation until the company’s sale in 2016. She is a well-known advocate for financial literacy and is a member of the American Academy of Arts and Sciences, the Executive Committee of the Investment Company Institute, and LA28 Olympic and Paralympic Games. She earned her bachelor’s degree from the School of Public and International Affairs at Princeton University. In 2019, Mellody Hobson received the Woodrow Wilson Award, the highest honor annually granted by Princeton University to an alumnus whose career reflects a commitment to national service. She has also received honorary doctorates from Howard University, Johns Hopkins University, St. Mary’s College, and the University of Southern California.

Mirela Agache Durand

CEO of Groupama AM (Europe). Appointed to this role in 2020, Mirela Agache Durand is a CFA charterholder and holds a PhD in plasma physics. She began her career in 1998 at Oddo & Cie, where she successively held roles as financial engineer, portfolio manager of balanced funds, and later head of the multi-asset and multi-manager investment team. In 2014, Mirela Agache Durand joined La Banque Postale Asset Management as Deputy Chief Investment Officer. Since 2017, she has served as CEO of Tocqueville Finance, a role she held simultaneously with her responsibilities as Co-CEO of LBPAM.

Valérie Baudson

CEO of Amundi (Europe). In May 2021, Valérie Baudson was appointed CEO of Amundi. Previously, since 2016, she had served as CEO of CPR AM, an Amundi subsidiary recognized for its active management capabilities in thematic and ESG funds. At that time, she also became a member of Amundi’s General Management Committee and took on oversight of the firm’s subsidiaries in Germany and Switzerland. Valérie Baudson joined Amundi in 2007 to lead the development of its ETF business, which would later become the largest player in Europe in this segment. In 2013, she joined Amundi’s Executive Committee and, in 2020, assumed global responsibility for the firm’s wholesale and wealth management division. Before joining Amundi, Valérie Baudson served as Secretary General and later Head of Marketing for Europe at Cheuvreux, the European brokerage subsidiary of the Crédit Agricole Group. She began her career in 1995 at Banque Indosuez, in the General Audit department. She is also a member of the Board of Directors of CA Indosuez Wealth and a board observer at PREDICA. In addition, she serves on the Strategic Committee of the Association Française de la Gestion Financière (AFG) and is President of the Investors’ College of Paris Europlace. In 2022, she was named Chevalier de la Légion d’Honneur (Knight of the French Legion of Honour). That same year, together with Yves Perrier, she received the Financier of the Year award granted by Andese (Association Nationale des Docteurs ès Sciences Économiques et en Sciences de Gestion). Valérie Baudson graduated from the business school HEC Paris.

Yie-Hsin Hung

President and CEO of State Street Investment Management (U.S.). In addition to her current roles, Yie-Hsin Hung is a member of the State Street Executive Committee, the company’s senior leadership team. She also co-leads the firm’s Corporate Strategy and Marketing functions and oversees the State Street Markets business. Before joining State Street, Yie-Hsin Hung served as CEO of New York Life Investment Management. In 2025, she was included in Barron’s list of the “100 Most Influential Women in U.S. Finance” and in American Banker’s list of the “25 Most Powerful Women in Finance.” In 2024, she was named to Forbes’ list of the “World’s 100 Most Powerful Women.” In 2023, Pensions & Investments recognized her as one of the “Most Influential Women in Institutional Investing.” She is a former Chair of the Board of Governors of the Investment Company Institute and serves on the Board of Trustees of Northwestern University, as well as being a member of C200, The Women’s Forum of New York, and the National Association of Corporate Directors. Yie-Hsin Hung holds an MBA from Harvard University and a Bachelor of Science in Mechanical Engineering from Northwestern University. In 2019, she received the Distinguished Alumni Medal, the highest honor awarded by the Northwestern Alumni Association.