Investment Perspectives - January 2026

2025 proved a tumultuous year for investors here in the UK and further afield, with sensational headlines in plentiful supply. Despite this, equities notched up a stellar year of performance, although heady valuations have sparked conversations about the resilience of the market. This is an area our capital markets team explore, alongside their outlooks for credit markets, gilts and property.

In this edition of Investment Perspectives and to kick off 2026, we’ve collated a range of articles to help you take stock and plan for the year ahead. Here’s what’s included:

• DB investment outlook - As our CIO, I set out why diversification is top of the menu for investors.
• Key DC themes - Alison Leslie, Head of DC Investment, discusses her key themes for 2026, including innovation in the decumulation stage, consolidation and value for money.
• Sustainable investment – 2026 and beyond - André Ranchin and Christina Williams explain why portfolio resilience, effective engagement and looking beyond portfolio emissions are important themes this year.
• Taking stock: LDI considerations in 2026 - Stephen Jasinski reflects on the outlook for gilts after the Chancellor’s autumn budget, and lays out key talking points for schemes that hold LDI assets.
• Capital markets update - A retrospective look at the key drivers of markets in Q4, alongside our asset-class outlooks for the medium term. Co-authored by our capital markets team.
• A fireside chat with Chris Arcari

To read the full edition, click below: 

Read the full edition

We’re always keen to hear how we can help you achieve the best investment outcomes for your pension scheme members. Please get in touch for a one-to-one conversation on any of the topics covered in our articles.

Important information

This communication has been compiled by Hymans Robertson LLP® (HR) as a general information summary and is based on its understanding of events as at the date of publication, which may be subject to change. It is not to be relied upon for investment or financial decisions and is not a substitute for professional advice (including for legal, investment or tax advice) on specific circumstances.HR accepts no liability for errors or omissions or reliance on any statement or opinion. Where we have relied upon data provided by third parties, reasonable care has been taken to assess its accuracy however we provide no guarantee and accept no liability in respect of any errors made by any third party.

General Investment Risk Warning

Please note the value of investments, and income from them, may fall as well as rise. This includes but is not limited to equities, government or corporate bonds, derivatives and property, whether held directly or in a pooled or collective investment vehicle. Further, investments in developing or emerging markets may be more volatile and less marketable than in mature markets. Exchange rates may also affect the value of investments. As a result, an investor may not get back the full amount of the original investment. Past performance is not necessarily a guide to future performance.

Derivatives

All forms of derivatives can provide significant benefits, but may involve a variety of significant risks. Derivatives, both exchange-traded and OTC, include options, forwards, swaps, swaptions, contracts for difference, caps, floors, collars, combinations and variations of such transactions, and other contractual arrangements (including warrants) which may involve, or be based upon one or more of interest rates, currencies, securities, commodities, and other underlying interests. 
 
The specific risks presented by a particular derivative transaction depends upon the terms of that transaction and your circumstances. It is important you understand the nature of these risks before entering into a derivative contract.

In general, however, all derivatives involve risk including (amongst others) the risk of adverse or unanticipated developments of a market, financial or political nature or risk of counter-party default.

In addition, you may be subject to operational risks in the event that your manager(s) does not have in place appropriate legal documentation or internal systems and controls to monitor exposures of this nature. 

In particular, we draw your attention to the following: -
• Small changes in the price of the underlying security can lead to a disproportionately large movement, unfavourable or favourable, in the price of the derivative.
• Losses could exceed the amount invested. There may be a total loss of money/premium. Further, an investor may be called on to make substantial additional payments at short notice. Failure to do so in the time required can result in additional loss.
• The right to subscribe is invariably time limited; if such a right is not exercised within the pre-determined timescale, the derivative may be rendered worthless.
• Not all derivatives are liquid (that is, they may be difficult or, at times, impossible to value or sell). You may incur substantial costs if you wish to close out your position. OTC derivatives in particular can introduce significant liquidity risk and other risk factors of a complex character.
• OTC derivatives may result in exposure to the creditworthiness of the derivative counter-party.
• Derivatives used as part of ‘protection’ strategies may still expose the investor to an unavoidable difference between the underlying asset (or other interest) and the protection offered by the derivative.