PGIM: The Year Ahead 2026 Best Ideas

PGIM’s Best Ideas highlights what we believe to be six of the most appealing investment opportunities for 2026, all framed by the following four market‑shaping themes:

• The Era of Fiscal Dominance...and the End of Central Bank Innocence: Geopolitical rivalry is expensive. Record defense budgets, expanding industrial policy, and rising populism will likely compel major economies to run historically high deficits. Accompanying demands for low monetary policy rates erode central banks’ inflation-fighting credibility. Repriced term premia will increasingly determine the level of long-term rates.

• Carry On: Lean into Structural Growth: Steeper yield curves, stretched market valuations, and reconfigured economies warrant diversified portfolios constructed for carry and income. The theme extends across the global fixed income and real estate sectors with varying methods of tactical implementation.

• Productivity Boost Redux: The $7 trillion global AI buildout threatens near-term over-investment risks. Yet, historical precedent suggests it could ultimately seed a productivity boost that determines growth trajectories, debt dynamics, and the future winners and losers across global industries and corporations.