Latest insights from Nuveen’s Q4 2025 Global Investment Committee (GIC). Outlook From Anders Persson, Chief Investment Officer for Global Fixed Income
Best ideas
Securitised assets (especially commercial mortgage-backed securities) and senior loans offer a compelling combination of attractive yields and value.
For municipal bonds, we favor water/sewer bonds and select opportunities in health care and higher education.
Investment positioning
We maintain a broadly positive outlook toward global bond markets despite fixed income appearing rich on a credit spread risk premium basis. Current yields remain very attractive, credit fundamentals are strong and investor demand for fixed income assets remains elevated.
Long-term rates have declined over the last month, and we expect bond market volatility will remain elevated. We encourage investors to take advantage of volatility driven by policy shifts and economic deceleration through broad diversification and active management. We advocate maintaining a neutral duration stance while continuing to identify attractive credit opportunities. We expect duration will reassume its role as a growth hedge over the coming quarters.
Also read: Global Asset Allocation: The View From Australia
Regarding specific bond market sectors, we think investment grade credit faces potential headwinds from extremely tight credit spreads and extended duration profiles. And we see better valuations outside of U.S. Treasuries as well. Senior loans, CLOs and securitised assets remain attractive given their relatively high yields. We are increasingly optimistic about emerging markets debt given improving fundamentals and appealing relative valuations. High yield and preferred securities feature solid fundamentals with favorable long-term prospects, though recent price appreciation has elevated valuations.
Municipal bonds represent one of our most preferred market segments, with prices dislocated from underlying fundamentals (primarily due to substantial supply increases). State and local government finances remain resilient, and, given municipal bonds’ underperformance relative to the broader fixed income market this year, we view current levels as presenting exceptional value opportunities.
Private credit markets have experienced some spread compression, yet overall yields remain attractive with robust demand, particularly within the middle market loan segment.
