Alternative credit insights: Diversify globally, derisk locally

In an era of geopolitical uncertainty and evolving credit markets, alternative credit offers potential for resilient income through global diversification paired with local expertise. Discover how disciplined, on-the-ground risk management can help investors navigate volatility and position portfolios amid structural headwinds in traditional fixed income.

Navigating global opportunity and local risk

As markets are increasingly influenced by geopolitics, economic uncertainty and evolving credit markets, opportunity lies beyond borders. Alternative credit continues to offer resilient income potential, but successful outcomes depend on thoughtful diversification and disciplined risk management. By pairing global reach with local insights, investors can build portfolios designed to withstand volatility, capture durable yield and support long-term objectives.

Beyond U.S. exceptionalism

Concerns are growing over economic activity, political tension and policy uncertainty in the U.S., making for a challenging environment for global investors. Headlines throughout 2025 underlined this uneasiness; foreign investors were reportedly leaving U.S. markets in droves amid currency volatility and tariff-driven fears, possibly spelling the end of U.S. exceptionalism as we know it. Adding to these doubts is the specter of an increasingly deglobalized world.
In this climate, separating rhetoric from reality is crucial. The world may be changing, but global private credit — whether corporate or asset-backed — remains an attractive opportunity set for those seeking diversified sources of stable income in an unstable time. Key to success is understanding and managing the risks associated with each credit segment.

U.S. remains rich source of opportunity despite new risks

Despite prolonged uncertainty running through the country, the U.S. economy has demonstrated its ability to withstand shocks and beat pessimistic forecasts. Recent fears of recession have given way to tangible optimism. U.S. GDP growth for 2026 is projected to outpace developed market peers, trailing only China globally (Figure 1). Corporate earnings remain robust, and default rates for U.S. credit, especially among higher-rated borrowers, remain overwhelmingly stable. The U.S. dollar, although volatile, continues to anchor international portfolios, providing depth and liquidity that few global markets can match.

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