Infundly Weekly Briefing - 23 October 2026
This week’s research brings together several developments with direct implications for professional fund selectors. New long-term capital market assumptions suggest higher prospective returns across traditional asset classes, while research into private credit, geopolitical fragmentation raises questions about how investment risks are transmitted and managed.
A particularly useful theme is the distinction between the investment opportunity a manager identifies and the risks introduced by the way that opportunity is accessed. That applies equally to private-market fund structures, and the assumptions underpinning strategic asset allocation.
J.P. Morgan Asset Management — 2027 Long-Term Capital Market Assumptions
Published: 19 October 2026
What changed: J.P. Morgan Asset Management has increased its forecast annual return for a traditional 60/40 equity-bond portfolio from 6.4% to 7.0% over the next 10–15 years, measured in US dollars.
Higher real bond yields and stronger expected corporate profitability support the improvement. Its forecast for US large-cap equities rises from 6.7% to 7.5%, while global aggregate bonds are expected to return 5.3%.
The research also projects that allocating 30% to diversified alternatives could increase portfolio returns to 7.5% and improve the Sharpe ratio by 21% relative to its conventional balanced portfolio.
Worth reading because: This is particularly relevant to strategic asset allocation and multi-asset manager research.
The interesting question is not simply whether expected returns have improved, but which assumptions are responsible for the change.
Selectors should examine how managers incorporate higher starting yields, AI-related productivity expectations, equity valuations and changing correlations into portfolio construction.
The projected benefits of alternatives also warrant scrutiny of liquidity, fees, valuation practices and implementation costs. Modelled improvements in risk-adjusted returns do not necessarily translate directly into realised investor outcomes.
BIS — Bank Liquidity Regulation and the Growth of Private Credit
Published: 20 October 2026
What changed: New research from the Bank for International Settlements examines whether post-financial-crisis bank liquidity regulation contributed to the expansion of private credit.
The authors find that private-credit activity increased more significantly in US markets where banks were more exposed to the Liquidity Coverage Ratio requirements or faced larger initial liquidity shortfalls.
The estimated effect is comparable in magnitude to the impact of increased capital requirements associated with the 2012 US bank stress tests.
The findings suggest that private credit’s expansion reflects, in part, a structural redistribution of lending activity following changes in banking regulation. The paper does not establish whether this shift has increased or reduced overall systemic risk.
Worth reading because: This provides useful context for assessing private-credit managers.
The growth of an asset class does not necessarily demonstrate that its investment opportunity has become more attractive. Some of that growth may reflect changes in where lending can be undertaken.
For selectors, the research raises questions about whether private-credit managers are benefiting from genuinely attractive lending opportunities or increasingly competing away the premiums that originally supported the strategy.
It also reinforces the importance of understanding underwriting standards, borrower quality, leverage and the sustainability of returns as the market matures.
Investment Association — Private Markets Democratisation in the UK: Promise, Progress and Key Next Steps
Published: 15 October 2026
What changed: The Investment Association has published a report examining the practical barriers to broadening private-market investment access.
Drawing on discussions with more than 20 asset managers, wealth managers and platforms, the report argues that operational infrastructure, rather than the absence of suitable regulatory frameworks, is becoming a principal constraint.
The challenges include platform compatibility, reporting standards, investor education, valuation transparency and the administration of non-daily dealing arrangements.
The report also highlights the need for greater consistency in communicating liquidity terms and redemption procedures.
Worth reading because: This is particularly relevant to fund governance and product due diligence.
As private-market exposure becomes available through a wider range of investment vehicles, selectors need to distinguish between the merits of the underlying assets and the suitability of the structure used to access them.
Questions around dealing frequency, valuation, liquidity management and investor expectations should therefore be considered alongside investment philosophy and manager capability.
The report is industry-led, but it provides a useful perspective on where operational and governance challenges remain.
BIS — Geoeconomic Pressure
Published: 19 October 2026
What changed: This substantial academic working paper examines how companies respond to tariffs, sanctions and export restrictions.
The researchers use large language models to analyse corporate earnings calls, identifying how firms describe their responses to geopolitical and economic pressure.
Their findings suggest that export restrictions can encourage domestic research and development, while sanctions and tariffs produce more varied effects.
For example, sanctions have created opportunities for companies in third-party countries to replace disrupted trading relationships. Tariffs, meanwhile, have frequently resulted in higher input costs and pressure on corporate margins.
The research provides evidence that geopolitical fragmentation is changing corporate investment, supply chains and competitive positioning, rather than simply altering trade volumes.
Worth reading because: This has direct implications for global equity and emerging-market manager research.
Geopolitical exposure is often assessed through country allocations or revenue breakdowns. However, companies can experience substantial changes in competitive positioning without materially changing their geographic revenue mix.
Selectors should increasingly examine how managers identify businesses benefiting from supply-chain restructuring, distinguish temporary disruption from lasting competitive advantage and assess the associated investment costs.
It is also an interesting example of AI being used to extract evidence from corporate disclosures, although those disclosures still require independent validation.
BIS — Inflation After the Iran War
Published: 19 October 2026
What changed: Ricardo Reis examines how the energy-price shock associated with the Iran conflict could influence inflation across the UK, US and euro area.
The paper considers four transmission mechanisms: direct price increases, inflation expectations, fiscal responses and the credibility of central-bank inflation targets.
Using evidence available through May 2026, the analysis suggests that the shock could add approximately 1.5–2 percentage points to cumulative inflation across 2026 and 2027.
However, the paper finds limited evidence that longer-term inflation expectations have become unanchored, suggesting that the consequences may be less persistent than those experienced during the 2021–24 inflation episode. These are conditional estimates based on the information available at the time, not an updated October forecast.
Worth reading because: This provides useful context for fixed-income and multi-asset due diligence.
A temporary inflation shock and a sustained change in the inflation regime can justify very different portfolio responses.
For selectors, the important question is whether managers distinguish between the initial inflation impulse and the mechanisms that might make it persistent.
That distinction influences duration positioning, inflation-linked bond exposure, credit selection and the expected diversification benefits of government bonds.
Amundi Investment Institute — Cross Asset Investment Strategy: October 2026
Published: 22 October 2026
What changed: Amundi examines whether equity markets can remain resilient with US government bond yields above 5%.
Its analysis notes that the US 10-year Treasury yield reached approximately 5.3% in early October, its highest level in almost 25 years, while major US equity indices had continued to demonstrate resilience.
The research argues that the implications for financial markets depend on why yields are rising, rather than simply the absolute level reached.
It also considers the potential investment implications of the forthcoming US midterm elections, including the possibility of changes in fiscal-policy direction.
Worth reading because: This complements J.P. Morgan’s longer-term capital market assumptions by focusing on the immediate market environment.
For multi-asset selectors, the distinction between higher yields driven by stronger economic growth, persistent inflation or increasing fiscal risk is important.
Each scenario has different implications for equity valuations, credit spreads, duration and portfolio diversification.
The research provides a useful framework for questioning whether managers are responding to changing market prices or to the underlying economic developments those prices reflect.
Infundly takeaway
A common theme running through this week’s research is that the relationship between investment opportunity, portfolio implementation and investor outcomes is becoming increasingly important. J.P. Morgan’s revised capital market assumptions suggest a more attractive long-term return environment, particularly for fixed income, while also highlighting the potential benefits of alternatives. The BIS research on private credit and the Investment Association’s examination of private-market access provide an important counterpoint: growth in an asset class, or improved prospective returns, does not by itself establish that the associated fund structure, liquidity arrangements or expected risk premium are attractive. For selectors, understanding how an opportunity is accessed and how its economic characteristics translate into investor outcomes remains essential.
The second theme is the importance of understanding what sits behind headline exposures and market movements. Geopolitical fragmentation can alter corporate competitive positions and supply chains without obvious changes in geographic allocations, while an inflation shock can have very different investment implications depending on whether it remains temporary or becomes embedded in expectations. Amundi’s analysis makes a similar point about higher bond yields: the level matters, but so does the reason they are rising. Together, the research reinforces the value of examining not only what managers believe, but the evidence supporting those beliefs, how they are translated into portfolio decisions and what would cause those decisions to change.
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