The Economy
The economy holds up amid an uncertain political environment
- The central outlook for 2026 is built around a growth scenario—stronger in the United States than in other regions—and a gradual moderation in inflation.
- Growth in the U.S. continues to surprise on the upside due to its resilience and, in 2026, will continue to rely on the same three pillars: consumption, investment (AI-related capex), and public spending.
- Europe presents a more diverse picture, as Germany and France remain dependent on the adoption of politically difficult decisions that should serve as a springboard for a new growth cycle.
- Inflation in the U.S. is moderating, albeit slowly. In its most recent meeting, the Fed decided to pause further interest rate cuts as it faces a dilemma: inflation is moderating, but not enough, while at the same time the labor market is losing momentum.
- China continues to heal the wounds caused by its real-estate crisis, which appears to be absorbing a significant portion of fiscal and monetary stimulus.
Markets
Political uncertainty
- Markets remain dominated by the narrative around artificial intelligence (AI), which has boosted the valuation of certain companies—albeit with volatility. In parallel, this trend is also weighing on other companies that investors believe, rightly or wrongly, may be negatively affected by AI.
- Beyond this, the results published by high-quality companies continue to be solid. Although large technology firms continue to perform well, we are likely to see positive returns that are more diversified by business type, geography and investment style.
- Fixed income remains ambivalent, caught between, on the one hand, economic strength and, on the other, persistent questions around inflation. In any event, the main opportunities lie in the intermediate segments of the yield curve.
- Following a strong rally, gold and other precious metals experienced a sharp correction on the last day of the month, highlighting the speculative nature of the gains seen in recent weeks.
Investment Policy
Diversification with conviction
- In 2026, the main risks will stem primarily from politics. Both the concentration of geopolitical “hot spots” and the change in Fed leadership scheduled for next May may introduce elements of uncertainty and volatility.
- Portfolios maintain a slight underweight in U.S. equities, avoiding the high concentration in market indices and seeking diversification along with less demanding valuation multiples (P/E ratios).
- Portfolios as a whole continue to rely— as our main risk‑management mechanism—on high‑quality businesses (quality stocks) with stable margins, predictable growth and low or no leverage.
- In fixed income, we continue to avoid long durations, favouring intermediate maturities (3Y / 5Y). This positioning provides flexibility to capture potential opportunities in long‑term yields should they arise.
LEGAL CONSIDERATIONS
1) This information is intended for advertising and informational purposes only. It does not constitute and should not be considered investment advice or legal opinion, nor is it intended to replace the necessary advice in these matters or constitute an offer to sell or a solicitation of an offer to buy.
2) All opinions and estimates provided are based on sources considered reliable. However, EDM Gestión, SAU, SGIIC cannot guarantee their accuracy or completeness and assumes no responsibility for any direct or indirect loss that may result from the use of the information provided in this document.
3) EDM Gestión, SAU, SGIIC warns that past performance is not a reliable indicator of future results.
4) EDM Gestión, SAU SGIIC is a Spanish public limited company registered in the Special Register of Management Companies of Collective Investment Institutions of the CNMV under number 49 and in the Madrid Commercial Registry, volume 36,739, folio 52, sheet M-658.326, with tax ID: A-58.217.175. Its activities include, among others, the representation, management, and administration of Funds and Investment Companies domiciled and regulated in Spain, as well as discretionary portfolio management.
