Model Portfolio Pulse: AI and EM growth trends strengthen

As 2026 gets underway, the global economy continues to show surprising resilience, with the U.S. maintaining strong growth momentum supported by artificial intelligence (AI)–driven investment and steady consumer spending. Financial markets’ strength throughout 2025 has reinforced both confidence and consumption, helping sustain the expansion. Looking ahead, we remain constructive on the global growth backdrop, with fiscal stimulus, cooling inflation, and an accommodative Federal Reserve (the Fed) providing a supportive environment for risk assets.

Key takeaways

• U.S. economic growth remains solid, powered by AI-related capital expenditures (CapEx) and consumer activity.
• Global expansion is expected to continue in 2026, with the One Big, Beautiful Act (OBBBA) providing an additional U.S. boost.
• Inflation pressures are contained, supported by disinflation in shelter.
• The macro backdrop remains supportive for financial markets with the Fed likely to stay accommodative and possibly cut rates.

U.S. growth remains steady as AI investment and consumption lead

The U.S. economy continues to outperform expectations, largely due to the ongoing surge in AI-related capital expenditures and resilient consumer spending. The strong performance of financial markets throughout 2025 has created a positive wealth effect, helping support consumption as households feel more confident about their financial position.

Looking ahead, fiscal stimulus from the OBBBA is poised to provide an additional lift to the U.S. economy. This could widen the growth differential between the U.S. and other major economies in 2026. Even so, growth outside the U.S. is expected to remain positive with global conditions broadly supportive.

Inflation remains contained, supported by shelter disinflation

While growth expectations remain firm, inflation continues to trend in the right direction. Disinflation in the shelter component of the Consumer Price Index (one of the largest and heaviest weighted portions of the index) is expected to help keep overall price pressures contained. Even if some categories experience renewed upward pressure due to stronger growth or lingering tariff effects, the outsized influence of shelter should offset most of these moves.

This combination of steady growth and controlled inflation maintains a favorable backdrop for monetary policy. With price pressures remaining manageable, the Fed is likely to stay accommodative and may lower interest rates once or twice in 2026. A supportive Fed, combined with the growth outlook, should help sustain constructive market conditions.

Natixis model portfolio positioning

Our model portfolio themes remain consistent and continue to reflect a constructive stance toward risk assets:

• Overweight stocks vs. bonds overall
• A tilt toward growth stocks over value stocks
• Overweight emerging market (EM) stocks
• Slightly overweight U.S. stocks
• Slightly underweight developed international stocks
• Overweight EM U.S. dollar–denominated government bonds
• Neutral duration

While our high-level themes were unchanged in December, we did implement several adjustments within EM equity exposure. We reduced our broad EM exchange-traded fund (ETF) and diversified into two targeted regional exposures. The first was EMXC, an MSCI Emerging Markets ex China ETF, which allowed us to decrease exposure to China while increasing allocations to Taiwan and South Korea – two markets benefiting from the global AI build-out.

We also added ILF, a Latin America equity ETF, reflecting the region’s improving political backdrop and its growing importance in global commodity supply chains. With rising demand for metals needed for AI infrastructure, electric vehicle production, and national defense, Latin America stands to benefit from strong structural tailwinds.

We maintain a positive outlook on EMs overall, supported by loose global financial conditions, expected Fed rate cuts, and EM participation in the AI boom. In the U.S., we retain a slight overweight with a continued preference for growth sectors, especially technology, where earnings momentum remains strong. Developed international equities are held at a slight underweight as we find more compelling opportunities elsewhere.

In fixed income, positioning remains conservative. With tight credit spreads and Treasury yields likely to be rangebound, we prefer to take risk on the equity side of the portfolio. We continue to hold neutral duration and will look to take advantage of any volatility that emerges in the months ahead.

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