LGT Private Banking House View

January 2026 - in a nutshell

Before the year comes to an end, we would like to take the opportunity to highlight our monthly strategic assessment. In our view, economic growth is set to slow but remain positive, while inflation has likely peaked at lower than feared levels and financial conditions are still supportive. 

  • Data
  • Autore Gérald Moser, Head Investment Solutions Europe, LGT Private Banking
  • Tempo di lettura 7 minuto

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Against this backdrop we continue to see a constructive macro picture and therefore maintain a moderate risk on positioning: equities remain "Overweight", fixed income and alternatives "Neutral", and cash "Underweight" versus strategic portfolio weights, reflecting our preference to stay invested while retaining flexibility.

Within equities, we stick to our regional tilt towards emerging markets, which should benefit from lower interest rates and a weaker US dollar. Focusing on sectors, we are modestly increasing cyclical exposure by upgrading industrials and downgrading real estate, as industrials are better positioned to profit from policy stimulus and reduced tariff uncertainty. In the fixed income space, we expect the tailwind of falling key interest rates to largely disappear in the next year. 

On currencies, we position for a gradually softer US dollar, based on narrowing real rate differentials. In precious metals, gold remains our preferred exposure due to its monetary and safe haven characteristics and strong central bank demand, while we have moved to a more neutral stance on silver after its strong 2025 rally.

Macroeconomic environment

The recent flood of macroeconomic data confirms an orderly slowdown in consumption and employment, alongside a gradual rise in inflation in the United States. At the same time, it also suggests that earlier fears of an imminent recession were likely overstated, and that the US economy has weathered the difficult environment of 2025 surprisingly well. The outlook for 2026 has brightened, supported by easing inflation concerns, renewed monetary policy room at the Federal Reserve, and fiscal impulses coming from Europe.

Investment strategy

We still see a constructive environment, with moderating but positive growth, inflation near its peak at lower-than-feared levels and supportive financial conditions. Despite stronger risk appetite and a roughly 3% rise in global equities since November, we maintain only a moderate risk-on stance. Our tactical positioning is unchanged: equities remain "Overweight", fixed income and alternatives "Neutral", and cash "Underweight", all versus strategic portfolio weights.

Equity strategy

After a roughly 5% correction in November, global equity markets have returned to positive performance. In December, the Fed cut rates by 25 bps and uncertainty around AI related investments has eased. Tech remains the dominant sector, but the upswing is broadening - a positive development that helps reduce risks for equity markets. Now, the focus has shifted back to strong fundamentals: earnings growth is expected to grow by 15% next year. Our regional preferences remain unchanged: We continue to favour emerging markets, as they should benefit from a weaker USD and lower interest rates. At the sector level, we are increasing our cyclical exposure by downgrading real estate to "Neutral" and upgrading industrials to "Attractive". While real estate shows no visible catalysts for a better performance, industrial companies are likely to benefit from stimulus measures and reduced tariff uncertainty.

Fixed-income strategy

In summary, we expect the tailwind of falling key interest rates to largely disappear in 2026, while global growth will improve moderately from a low level. Total returns in the fixed income sector are therefore likely to be significantly lower than in 2025 and will primarily be in the range of current yields – or slightly below, should there be a mild steepening of the yield curve. Coupon clipping remains the key driver of returns, accompanied by only moderate spread widening. Accordingly, we are sticking to our preference: emerging market hard currency remains "Attractive", high yield "Neutral", while we (newly) rate investment grade and government bonds as "Unattractive".

Currency strategy

We expect a softer USD over the next six to 12 months, with EUR strengthening against the dollar and USD/CHF drifting lower. Narrowing real rate differentials as the Fed eases while the ECB and SNB keep rates stable, clearer ECB policy guidance, and the franc’s structural safe haven strength support this view. Our qualitative stance is EUR "Attractive" vs USD and USD "Neutral" vs CHF, with risks mainly from a more hawkish Fed, a dovish ECB or active SNB resistance to CHF appreciation.

Precious metals

Gold remains our preferred precious metal due to its core monetary and safe haven role, and strong central bank demand, so we keep it in the "Attractive" category. Silver’s 2025 rally was driven by rising industrial and investment demand, supply constraints and logistical and policy risks, but these positives are now largely reflected in the price. With elevated volatility and a more balanced near term risk reward profile, we have shifted silver from "Attractive" to "Neutral", while maintaining an "Attractive" stance on gold.

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