Insights

Economic growth remained robust in the fourth quarter, fueled by strong spending from high-income households and productivity gains linked to artificial intelligence-related investments.

As we enter 2026, we are of the view that the next 12 months may be more about total return and less excess return.

In October 2025, the Federal Open Market Committee cut interest rates by 25bps to a range of 3.75 to 4.00 percent and announced an end to quantitative tightening in December.

The Treasury yield curve bull flattened in September, with the 10-year yield falling by eight basis points.

Above-average yields, solid investor demand, and stable credit fundamentals are counterbalanced by tight spreads, rising event risk, and a slowing labor market driving a modest overweight to the corporate sector, with a defensive posture.