Santander Asset Management expects equity markets to hit new highs and sees new opportunities in European private debt
Santander Asset Management (SAM), Banco Santander’s asset manager, expects 2026 to be a year of sustained global growth, slower inflation and more neutral interest rates, which would provide a conducive climate for risk assets such as equities and private markets. “The global economy’s resilience confirms that the cycle is not merely standing its ground, but evolving,” says Samantha Ricciardi, CEO of Santander Asset Management, in the introduction to the 2026 Market Report entitled Climbing towards new highs. She also adds: “This year we go one step further: we present our Capital Market Assumptions (CMAs), which are allowing us to incorporate alternative assets in multi-asset portfolios and more efficiently harness the sources of structural returns offered by markets.”
Banco Santander’s asset management arm expects global growth could be around 3%, driven by a strong US, recovery in Europe and the stability of emerging markets. Another economic catalyst would be monetary policies, which in recent years have acted as a brake but are now at more neutral levels that would allow for more advantageous financing conditions. Fiscal policies, which focus on investment in infrastructure, digitalization and the energy transition, would also shore up economic activity.
Against this backdrop, Santander Asset Management has selected three major investment ideas in traditional assets: global equities, harnessing opportunities in fixed income by capitalizing on regions with normalizing monetary policy and, finally, gold as a structural trend and portfolio diversifier. “The combination of sustained growth, continuation of the disinflationary process, and supportive fiscal policies creates a positive background for investment, with clear opportunities in risk assets, where diversification continues to be vital”, explains José Mazoy, global chief investment officer at SAM, who also highlights the expectation of a broader breadth in equity markets as earnings growth is widening across regions, sectors and companies.
In the United States, corporate earnings are expected to grow by around 15% for Standard & Poor’s 500 companies, extending to sectors beyond AI-related technology, and by 22% for small caps. In the euro area, earnings growth is expected to be near double-digit.
As for fixed income, the asset manager sees opportunities in UK and Brazilian sovereign bonds, where high carry comes with the prospect of rate cuts. In Brazil, the macroeconomic landscape “should allow the BCB to start an easing cycle early next year, with potential dovish surprises,” says Mário Felisberto, investment director at SAM Brasil. In the eurozone, SAM sees upside in credit due to the strength of the business fabric and an attractive carry in historical terms.
Meanwhile, gold remains an effective hedge as a key element for portfolio diversification, due to both the persistence of geopolitical and inflation risks and strong underlying fundamentals (continued purchases by central banks and investor appetite after years of negative flows).
At the same time, there are five aspects to monitor: high investment in certain AI sectors, geo-economic implications, the path of fiscal deficits, retail flows in the markets, and the direction of consumer spending in the US.
The report also emphasises the value of private markets and describes how they could play an increasingly important role in building diversified portfolios. These assets have ceased to be merely ancillary and are now an integral component. “In an environment of lower base rates and compression in traditional fixed income, investors are gradually seeing private credit (European Private Debt) as a core component of the portfolio’s income allocation, not just as a high-return niche”, the report explains.
European private debt stands out for its intrinsic value, underpinned both by structural factors – given the more modest development of the capital market and alternative financing compared to the weight of the banking system – and Europe’s relative allure compared to other regions, especially the US. “We believe that Europe currently offers a more fertile ground for generating alpha in private credit than the US, for several structural and cyclical reasons”, the report concludes Samantha.