Outlook 2026: Benoit Anne (MFS IM)
This text was originally written in Dutch. This is an English translation.
By Benoit Anne, Senior Managing Director and Head of Market Insights Group, MFS Investment Management
What are the economic expectations for 2026?
'The coming year will once again be characterised by a complex macroeconomic climate. Market volatility is likely to remain high due to ongoing geopolitical tensions, policy uncertainty, budget deficits and moderate growth. The US economy is proving resilient for the time being, although fiscal policy remains a significant source of risk. In Europe, the main question for investors in 2026 will be whether the high expectations for decent economic growth will actually be realised.
Despite the mixed picture, the outlook for risk-bearing investments is predominantly positive. As long as there is no recession, equities worldwide will benefit from favourable market sentiment. However, prices in certain parts of the US stock market are currently very high. A broad geographical spread is therefore advisable. European and emerging markets offer interesting alternatives to the risks associated with holding US equities.
Bonds are an effective means of limiting risk and diversifying portfolios. However, the return prospects for bonds are less favourable than two years ago. This is because interest rates are no longer as high and spreads are narrow compared to the past. As a result, there is little room left for either interest rates or risk premiums to fall. Finally, we believe that the dollar will remain sensitive to downward pressure in 2026, which could again benefit investment segments in emerging markets.'
As long as there is no recession, equities worldwide will benefit from favourable market sentiment.