Portfolio Building

At a time when the cost of living is rising and market volatility appears to be rising, too, investors may be looking for current income to bolster their portfolios. Current income can especially help investors at or near retirement to adapt to retired life.

The word seems to be spreading that small- and micro-cap stocks have so far been enjoying a stellar 2026. What seems less well known is that the current cycle of market leadership for the two asset classes stretches back to 2025 and has been in place for 14 months.

In this month’s Allocation Views, strong corporate fundamentals and resilient growth fuel our continued optimism toward equities into June, despite persistent inflation and more restrictive monetary policy.

In addition to a greater range of chips supporting AI development, several factors could cause the current cycle to last longer than expected.

While owning a significant amount of a successful stock can be incredibly lucrative – especially in a company on the rise – the more you own of a single equity, the more closely your personal financial fate is tied to its performance.

For many investors, wealth management still feels segmented. Investments are handled in one meeting, taxes in another, estate planning somewhere else, and major life decisions often happen independently of all three.

Since early 2025, value stocks have enjoyed a strong run, defying market volatility driven by trade tensions, geopolitical stress and macroeconomic uncertainty. That resilience may seem counterintuitive given value’s historically cyclical profile. Yet, we believe the underlying characteristics of value stocks are proving particularly well suited to today’s evolving market landscape.

For many registered investment advisors (RIAs), success has traditionally been measured in assets under management (AUM). As the industry evolves and consolidation accelerates, a broader question is emerging: are you building a practice or an enterprise?

Inflation and geopolitical uncertainty are pushing advisors and investors to rethink how they build diversified portfolios.

May saw 148 new ETF launches in May alone – although launch figures were partially driven by a 37-fund rollout from Corgi Insurance Services.

For more than four decades, PIMCO’s Secular Forum has provided a disciplined framework for stepping back from short-term market noise to assess the structural forces that will shape the global economy and markets over the next five years. Yet rarely has this exercise been more consequential than it has recently.

After more than three years of underperformance, our prognosis for global health care stocks remains positive. The sector now offers a broader set of high-quality companies at valuations that appear increasingly disconnected from fair value.

Begin with the print itself, because the headline flatters the internals only slightly. The bulk of May's gains came from leisure and hospitality, which added 70,000 jobs, nearly half of them in food services and drinking places; local government contributed 55,000, health care 35,000, and manufacturing a modest 7,000, while financial activities actually shed positions.

LPL Research analyzes bond markets as yields rise, exploring Fed policy expectations, inflation trends, and whether bad news is already priced into Treasuries.

Equity markets should remain supported by strong earnings and capital investment trends through 2026, but market concentration and macro risks leave less room for error.

The takeaway for both HY and EM corporates is straightforward. Once oil prices are above breakeven, further moves in oil tend to matter less for credit performance.

The Numbers Are Staggering – The Magnificent Seven stocks now carry a combined market cap larger than the GDPs of Germany, Japan, India, and the UK combined. Meanwhile, 2025 tech-sector capital expenditures rivaled the peak-year spending of the Manhattan Project, rural electrification, the Apollo moon shot, and the Interstate Highway System — all at once.

Building resilient portfolios in markets delivering mixed messages can be a challenging affair. In our ongoing engagement with the retail and advisor community at VettaFi, we hear first-hand just how investors are tackling that challenge this year.

In case you’ve been living under a rock for the past few months, three of the world’s largest and most consequential private companies—SpaceX, Anthropic and OpenAI—are preparing to go public in the same year. Together, they could add nearly $4 trillion in market cap to public markets.

Labor market fundamentals have improved meaningfully from last year’s near standstill while inflation has moved higher, driven in part by the Iran conflict and the resulting increase in petroleum and gasoline prices. As a result, Federal Reserve (Fed) officials are likely becoming more concerned about the risk of broader inflation pressures, a theme highlighted in this week’s ISM Manufacturing and Services PMI releases.

As we go to press, fighting in the Mideast has escalated, sending crude higher, but stocks, in early Monday trade, have shown remarkable stability following Friday’s deep selloff.

Chris Galipeau and Taylor Topoussis discuss high-conviction insights that go beyond media headlines.

In light of all this, our own view is that markets remain well positioned to continue to rally over the medium term, though given their stratospheric rise of late, a bit of a pullback might be in order in the short term.

Our broad message for the second half of 2026 is this: Income still matters, but investors should be selective. Despite the recent rise in Treasury yields, we suggest investors favor a below-benchmark average duration with their bond holdings, favoring short- and intermediate-term maturities.

With tech stocks pushing to new highs on enthusiasm around transformational technologies, the real question isn’t just momentum. It’s whether markets are becoming frothy, even bubble‑like, reminiscent of the dot‑com era. We don’t think so.

For years, the retirement industry has framed the challenge the same way: Participants aren’t engaged enough. Employers need better communication. Advisors need to educate more.

The latest Emerging Markets Insights discusses companies across various sectors that have expressed cautious optimism for the second half of 2026 despite ongoing geopolitical pressures and higher input costs. Templeton Global Investments highlight what they observed at a recently attended summit.

On June 4, Vanguard launched the Vanguard U.S. High-Yield Corporate Bond Index ETF (VCHY) on the Cboe BZX. VCHY provides ultra-low-cost exposure to higher-yield U.S. corporate bonds. It comes with an expense ratio of just five basis points.

Bond ETFs secured a record $64 billion in monthly inflows, driving total fixed-income ETF assets above $2.5 trillion.

When it comes to systematic investing, numbers tell only part of the story. Traditional quantitative models rely on prices, earnings, and balance sheet data, but words matter too.

The top-performing non-leveraged ETFs of 2026 span a distinct blend of digital assets, next-generation semiconductor technology, and localized international equity plays. For advisors assessing portfolio allocations heading into the second half of the year, these performance figures highlight a sustained risk-on appetite among investors.

It’s May 2026 and once again civilization and financial markets have made it 5-ish months into a new year without self-combusting like a Spinal Tap drummer. It is important to note that dozens of people and stocks spontaneously combust every year, but despite the increasing universality of AI, it’s “just not really widely reported.”

As a symbol of economic vibrancy and opportunity, it’s hard to beat the public market. Its storied venues, where everything from butter to trillion-dollar tech companies are bought and sold, are a foundation of the modern world.

For weeks now, media reports have been suggesting that Washington and Tehran are moving closer to a memorandum of understanding (MOU). In practical terms, that would extend the current ceasefire by roughly 60 days and create a window to negotiate a more durable peace agreement.

The U.S. economy appears resilient, judging from key economic measures. AI-driven capex continues to power investment, support equity markets, and sustain a wealth effect that has propped up consumption. Real GDP growth remains positive. Private sector balance sheets are in generally good condition and many higher income and wealthy households have benefited from equity markets gains.

The rise in U.S. Treasury (UST) yields, specifically the ten-year note, since late February has captured the attention of global investors in a very visible fashion. Just a couple of weeks ago, headlines were blaring that the UST 10-year yield had reached its highest level since the beginning of 2025, leaving market participants to wonder: What comes next?

The top-performing non-leveraged ETFs of 2026 span a distinct blend of digital assets and localized international equity plays.

On Wednesday, June 3, Wellington Management and The Hartford announced that Wellington will be acquiring Hartford Funds. Once the acquisition is complete, Hartford Funds will operate under Wellington’s brand through the firm’s U.S. Wealth business.

The IPO market may be entering one of its largest cycles in years, but the next wave may be defined less by breadth than by scale. Instead of hundreds of companies listing, a smaller group of AI and strategic infrastructure leaders could reset the market on their own.

Emerging markets offer important exposure to economic growth through rapid industrialization, natural resource endowments, and strong demographic dynamics.

Wealth today is more complex than ever. Investments, taxes, estate planning, insurance, and even family dynamics are deeply interconnected, and decisions in one area can have meaningful consequences in another.

Stocks extended their advance for a ninth consecutive week, with the S&P 500 rising more than 5 percent in May on the heels of April’s 10 percent rally. This nine-week run coincides with the market’s March 30 bottom, when early signs of a potential off-ramp or ceasefire in the Middle East began to emerge.

Learn what's in store for the remainder of 2026 and the challenges that lie ahead in our mid-year outlook for U.S. stocks and the economy.

Given its focus, the launch presents a milestone for the asset management community. ASD blends a sophisticated index design with structural corporate philanthropy to create an ETF that resonates with those invested financially and emotionally.

Space ETFs have seen strong inflows coupled with standout performance, capturing significant market attention. For investors, the rapid pace of capital deployment into the space economy underscores a compelling investment opportunity. For this edition of Bull vs Bear, writers Zandile Chiwanza and Elle Caruso Fitzgerald debate the use cases for space ETFs in portfolios.

US equities continued to climb higher in May, with the S&P 500 Index rising 5.1%. Further de-escalation of geopolitical tension in the Middle East has paved the way for the market’s 19.5% advance from the late-March lows.

Private markets have become integral to modern portfolios, with many investors searching for higher returns and diversification, including from public markets. But recent fund redemptions have reinforced that illiquidity isn’t theoretical, raising questions about the benefits of giving up liquidity. We see several—but investors must understand the trade-offs.

For the dollar-denominated investor weighing how to position for the back half of 2026, last week tightened a thesis we have been building all year.

Reducing equity exposure during periods of elevated risk is not the same as market timing. The financial industry has spend decades blurring that distinction.

Rising office delinquencies within commercial mortgage-backed securities (CMBS) reflect genuine pressures from shifting work patterns, higher interest rates, and greater refinancing risk.

Taylor Topoussis and Chris Galipeau discuss high-conviction insights that go beyond media headlines.

LPL Research analyzes stock valuations, finding them fair given growth, rates, inflation, and AI-driven earnings outlook despite risks.

Geopolitical risks are still lingering in the background, but the story lately has been all about earnings. A strong 1Q26 season, paired with a steady drumbeat of upbeat management commentary, has helped push the S&P 500 to 21 record highs this year.

Businesses are racing to build the physical infrastructure that makes AI usable at scale – data centers, the graphics processing unit (GPU) hardware stack, power, and cooling.

The global defense industry continues to move rapidly from legacy, heavy-hardware platforms to agile, unmanned systems. Today, the Trump Administration announced that it’s pursuing funding deals for drone companies in an effort to increase domestic production in today’s defensive landscape.

J.P. Morgan Asset Management has expanded its alternative lineup with the launch of the JPMorgan Managed Futures Plus ETF (JPFP) on the Nasdaq. The actively managed fund combines a core U.S. equity allocation with a systematic managed futures strategy spanning equities, bonds, currencies, and commodities.

Closed-end funds may not be a hot topic right now, but they offer a highly compelling means to solve today's macroeconomic woes.

New York City is facing one of the most significant fiscal challenges in recent memory. The NYC Comptroller has projected a $2.2 billion budget shortfall for FY2026, growing to a $10.4 billion gap in FY2027 (Source: New York City Comptroller, January 2026). That is a two-year deficit of roughly $12.6 billion.

For the last eight years, GMO’s Asset Allocation team has held a differentiated view on Japanese equities. Long before Japan re‑entered the global investment narrative, we argued that the country was undergoing slow but durable structural changes aimed at improving corporate governance, growth, and capital efficiency. These reforms were never expected to deliver quick results. Instead, we expected them to compound quietly over time.

The essential feature of a useful alternative asset isn’t that it’s unusual or exotic, but that its returns aren’t tightly linked to the risks that already dominate the portfolio. The value of an alternative asset comes from the way it interacts with the other assets in the portfolio.