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Global Investment Committee: 2020 outlook

While we see opportunities across asset classes, market returns may be lower over the coming year and decade compared to what we experienced in the past. Our 20/20 vision is a clearer path for growth.

Diversify and defend

Nuveen’s investment theme for the coming year is 20/20 vision: a clearer path for growth. The “clearer path” part is pretty straightforward: Our investment leaders think the macro fears that dominated most of 2019 have receded. Monetary policy is easier than it was a year ago, and global recession risks seem to have faded too. Trade policy remains a source of concern, but hasn’t been causing the sorts of market selloffs it did in late 2018 and earlier in 2019. And while other geopolitical events such as Brexit and the 2020 U.S. elections will likely spark fresh bouts of volatility, we think what has been the longest postwar economic expansion in history still has legs.

But it’s that “20/20 vision” part of our theme that I think may be more important. Because 2020 looks to be a year where investors will need keen vision to closely scrutinize markets to find the fewer investment opportunities that exist the longer the bull runs. That’s what we discussed at our year-end meeting of Nuveen’s Global Investment Committee, where we also debated what’s been happening in the markets, where we might be headed and, of course, what it all means for our clients’ portfolios.

As you’ll see in this outlook, while we continue to find good investment opportunities across asset classes, we are also increasingly concerned about fuller valuations, whether the asset in question is a stock or a real estate property. And although we’re calling for continued global growth, we recognize that the world is in the later stages of the current economic and credit cycle. So, putting our 2020 theme in context, picture a year in which the economy’s path seems clearer but markets … not so much. That’s a notable shift from what investors have come to expect over the past decade when we enjoyed strong financial returns while worrying about economic growth. The bottom line: Be prepared to tamp down your return expectations.

We think it makes sense for most investors to have a broadly defensive stance even as they stay invested, focusing on quality growth in equities and higher quality in fixed income, for example. We would balance that defensive stance by looking at select emerging markets equities and debt as well as a range of alternatives to help generate portfolio returns that may be tougher to find in traditional asset classes.

Regardless of how defensive you choose to be in your portfolio, diversification and selectivity will become ever more important, especially as we think yields will remain low, returns will be tough to come by and volatility may rise. In fact, as you’ll see reflected in our portfolio construction discussion, diversification itself is our highest-conviction trade. That means getting more exposure to more risks and more opportunities across asset classes, while also remaining nimble. And if that sounds like an argument for active management, it is.

We hope the insights offered here, along with Nuveen’s broad, diverse and deep investment platform and portfolio-construction expertise, can help you reach your unique investment goals in 2020.

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Profille image of Dimitrios Stathopoulos
Dimitri Stathopoulos
United States

All market and economic data from Bloomberg, FactSet and Morningstar.

The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature.

Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Past performance is no guarantee of future results. Investing involves risk; principal loss is possible.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.


The MSCI All Country World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The Bloomberg Barclays Global Aggregate Index is a flagship measure of global investment grade debt from 24 local currency markets. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. The Bloomberg Barclays High Yield Corporate Bond Index measures the USD-denominated, high-yield, fixed-rate corporate bond market. The Bloomberg Barclays Municipal Bond Index covers the USD denominated long-term tax-exempt bond market.

A word on risk

All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time. Equity investing involves risk. Foreign investments are also subject to political, currency and regulatory risks. These risks may be magnified in emerging markets. Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income. Investing in municipal bonds involves risks such as interest rate risk, credit risk and market risk, including the possible loss of principal. The value of the portfolio will fluctuate based on the value of the underlying securities. There are special risks associated with investments in high yield bonds, hedging activities and the potential use of leverage. Portfolios that include lower rated municipal bonds, commonly referred to as “high yield” or “junk” bonds, which are considered to be speculative, the credit and investment risk is heightened for the portfolio. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below-investment grade ratings. As an asset class, real assets are less developed, more illiquid, and less transparent compared to traditional asset classes. Investments will be subject to risks generally associated with the ownership of real estate-related assets and foreign investing, including changes in economic conditions, currency values, environmental risks, the cost of and ability to obtain insurance, and risks related to leasing of properties. Socially Responsible Investments are subject to Social Criteria Risk, namely the risk that because social criteria excludes securities of certain issuers for non-financial reasons, investors may forgo some market opportunities available to those that don’t use these criteria. Investors should be aware that alternative investments including private equity and private debt are speculative, subject to substantial risks including the risks associated with limited liquidity, the use of leverage, short sales and concentrated investments and may involve complex tax structures and investment strategies. Alternative investments may be illiquid, there may be no liquid secondary market or ready purchasers for such securities, they may not be required to provide periodic pricing or valuation information to investors, there may be delays in distributing tax information to investors, they are not subject to the same regulatory requirements as other types of pooled investment vehicles, and they may be subject to high fees and expenses, which will reduce profits. Alternative investments are not suitable for all investors and should not constitute an entire investment program. Investors may lose all or substantially all of the capital invested. The historical returns achieved by alternative asset vehicles is not a prediction of future performance or a guarantee of future results, and there can be no assurance that comparable returns will be achieved by any strategy.

Nuveen provides investment advisory services through its investment specialists.

This information does not constitute investment research as defined under MiFID. In Europe this document is issued by the offices and branches of Nuveen Real Estate Management Limited (reg. no. 2137726) or Nuveen UK Limited (reg. no. 08921833); (incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3BN), both of which entities are authorized and regulated by the Financial Conduct Authority to provide investment products and services. Please note that branches of Nuveen Real Estate Management Limited or Nuveen UK Limited are subject to limited regulatory supervision by the responsible financial regulator in the country of the branch.