Finance
Guggenheim warns of softer returns across US assets in 2026
Published by Global Banking & Finance Review®
Posted on January 20, 2026
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 20, 2026
2 min readLast updated: January 20, 2026
Guggenheim forecasts softer US asset returns in 2026 due to increased credit supply and weaker foreign inflows, impacting bonds, equities, and the dollar.
By Divya Chowdhury and Mehnaz Yasmin
DAVOS, Switzerland, Jan 20 - A flood of new issuance is likely to widen U.S. bond spreads modestly in 2026 while U.S. equities and the dollar will bear the brunt of weaker foreign inflows, fund managers at Guggenheim Partners Investment Management said.
"This year we're likely to see a little bit more supply of credit, which could put some modest pressure on credit spreads," Steven Brown, chief investment officer for fixed income at Guggenheim Partners Investment Management, told the Reuters Global Markets Forum.
Markets have already absorbed nearly $300 billion in investment-grade supply this year, helped by issuers' flexibility on timing, Brown said while attending the World Economic Forum's annual meeting in Davos, Switzerland.
While rates have stabilized, they are still higher than much of the past decade, allowing companies to issue opportunistically rather than out of need, he added.
That has created a generally more constructive backdrop for investors, with monetary policy no longer the main driver of the asset class.
In lockstep with bonds, Guggenheim also warned of headwinds for U.S. equities and the dollar, as investors steer capital to more lucrative non-U.S. assets.
"We've certainly seen sovereign nations that previously invested, say for example in U.S. Treasuries, move money into gold, silver and other precious metals or into other alternative investments, which then also has an impact on the currency," said Anne Walsh, chief investment officer of Guggenheim Partners Investment Management.
The cautious outlook follows a strong 2025, when Fed easing and a resilient economy delivered the market's best returns since 2020. Now, investors are gauging whether a slower-moving Fed and easier fiscal policy could stall that momentum and weigh on total returns.
While the fundamental story is a good one, supply and demand from foreign flows might weigh on returns, Guggenheim's fund managers said.
"I think it's going to be a good year for returns for everything, as is our base case, but returns are probably going to be a little bit lower than they were last year," Brown said.
(Join GMF on LSEG Messenger for live interviews: )
(Reporting by Divya Chowdhury in Davos and Mehnaz Yasmin in Bengaluru; Editing by Edmund Klamann)
Fixed income refers to investment types that provide returns in the form of regular, fixed payments and the eventual return of principal at maturity. Examples include bonds and treasury bills.
Foreign investments are investments made in assets located outside of an investor's home country. This can include stocks, bonds, real estate, or businesses in foreign markets.
Equities represent ownership in a company, typically in the form of stocks. When you buy equity, you become a shareholder and can benefit from the company's growth and profits.
Monetary policy is the process by which a central bank manages the money supply and interest rates to influence economic activity, inflation, and employment.
Explore more articles in the Finance category
