Key Takeaways
- • Neuberger Berman's Asset Allocation Committee retains a broadly constructive medium-term outlook on growth and risk assets despite the Middle East conflict, and sees no need for a material shift in strategic asset allocation, according to Jeff Blazek, Co-Chief Investment Officer, Multi-Asset Strategies, in the April 23, 2026 outlook.
- • The committee upgraded U.S. all cap and large caps to overweight from at target, maintained an overall overweight in global stocks including emerging markets and U.S. small and mid-caps, and downgraded European equities to underweight from at target.
- • Valuation multiple contraction has created compelling entry points in U.S. large caps, small and mid-caps, and select emerging markets, with China, India and Brazil remaining overweights.
- • Markets are pricing in more tightening than central banks are likely to deliver, making short-duration bonds one of the more compelling contrarian opportunities, per the committee.
- • Traditional diversifiers have underperformed and energy has been structurally repriced, leading the committee to give greater attention to commodities and hedged strategies for managing tail risk.
Summary
Neuberger Berman's Asset Allocation Committee, in its 2Q 2026 outlook dated April 23, 2026, says the Middle East conflict has made the investment environment harder to navigate but has not altered its constructive view or justified a material shift in strategic asset allocation. The committee describes the macro backdrop as still constructive but with less room for error, as slightly slower growth and higher inflation raise the premium on intentional, precise risk-taking. War-driven fiscal and inflation pressures have pushed government bond yields higher, policy expectations have repriced, and traditional diversifiers have not performed as expected.
On equities, the committee cites valuation multiple contraction alongside strengthening earnings estimates as creating compelling entry points in U.S. large caps, as well as in small and mid-caps, where it sees the broadening-out thesis as credible though not yet fully assured. It upgraded U.S. all cap and large caps to overweight from at target. Europe is described as the most exposed developed equity market, facing acute energy vulnerability, rising fiscal pressures and deteriorating growth, and the committee downgraded European equities to underweight from at target. Japan is viewed as better positioned given ongoing structural reform momentum, and the committee continues to hold an overweight there.
In emerging markets, the committee maintains overweights in China, India and Brazil, citing structural growth themes and attractive valuations. It acknowledges that China and India's energy import reliance creates near-term sensitivity but says its conviction in both markets remains robust.
In fixed income, the committee argues markets are pricing in more tightening than central banks are likely to deliver, making short-duration bonds one of the more compelling contrarian opportunities. In alternatives, with traditional diversifiers failing and energy structurally repriced, the committee suggests commodities and hedged strategies deserve greater attention for managing tail risk. The views are based on a six- to 12-month outlook and a hypothetical reference portfolio, and the publication states that nothing herein constitutes investment advice.
On equities, the committee cites valuation multiple contraction alongside strengthening earnings estimates as creating compelling entry points in U.S. large caps, as well as in small and mid-caps, where it sees the broadening-out thesis as credible though not yet fully assured. It upgraded U.S. all cap and large caps to overweight from at target. Europe is described as the most exposed developed equity market, facing acute energy vulnerability, rising fiscal pressures and deteriorating growth, and the committee downgraded European equities to underweight from at target. Japan is viewed as better positioned given ongoing structural reform momentum, and the committee continues to hold an overweight there.
In emerging markets, the committee maintains overweights in China, India and Brazil, citing structural growth themes and attractive valuations. It acknowledges that China and India's energy import reliance creates near-term sensitivity but says its conviction in both markets remains robust.
In fixed income, the committee argues markets are pricing in more tightening than central banks are likely to deliver, making short-duration bonds one of the more compelling contrarian opportunities. In alternatives, with traditional diversifiers failing and energy structurally repriced, the committee suggests commodities and hedged strategies deserve greater attention for managing tail risk. The views are based on a six- to 12-month outlook and a hypothetical reference portfolio, and the publication states that nothing herein constitutes investment advice.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.