‘Passive strategies will struggle to keep pace with the best active managers’

Commenting on the outlook for 2026 and portfolio positioning, Chris Metcalfe, Chief Investment Officer at IBOSS, part of Mattioli Woods says: “We were vocal as early as 2021 about how bond markets would evolve, and much of that has since played out. Our equity views have also been consistent, though in hindsight portfolios were positioned ahead of current market conditions fully emerging. A shift in the political and macro backdrop, including the return of Donald Trump, ultimately accelerated changes already building beneath the surface.

Looking to 2026, we believe some passive strategies will struggle to keep pace with the best active managers. Long held narratives such as unquestioned US exceptionalism tend to persist beyond what fundamentals justify, and advisers, clients and commentators are often slow to adjust. Those structurally committed to a “US and passive at all costs” approach naturally find it hardest to move away, particularly where fixed geographic and sector allocations have been positioned as permanent solutions.

Of course, we can be wrong. But our responsibility is to make informed decisions for clients rather than cling to consensus views.

IBOSS portfolios reflect this outlook. We remain underweight US equities, with a corresponding overweight to other global regions. Within US exposure, we are underweighting the Magnificent Seven, five of which have lagged global indices since early 2025, and more so following DeepSeek.

In fixed income, we favour emerging market debt and strategic bond funds, where active management can add most value in a less forgiving rate environment. We also maintain an overweight to commodities, particularly gold, for diversification.

Across our Core, Blended and Decumulation ranges, we remain overweight active strategies versus passive, reflecting our belief that higher dispersion and volatility favour skilled managers, despite the risk of false dawns. We also hold an overweight to infrastructure and real estate, where we see attractive long-term fundamentals and diversification benefits, especially at current entry valuations