Wilmington Trust's Meghan Shue says equities will outperform over the next 12 months

Summary

Wilmington Trust's Chief Investment Strategist Meghan Shue says the firm has moved from benchmark weight to a modest overweight in equities, expecting them to outperform fixed income over the next 12 months. They particularly favor small caps and emerging markets, citing a dovish Fed and disinflation as catalysts, and hold a slight overweight to large-cap growth. Value stocks could also perform well if the economy stays firm.

• Wilmington Trust increased equity exposure from benchmark to a modest overweight.
• Equities are expected to outperform fixed income over the next 12 months as geopolitical headline risks recede.
• The firm holds a dovish Federal Reserve view, forecasting rate cuts this year driven by disinflation, not economic weakness.
• Small caps and emerging markets are favored beneficiaries of lower rates, with EM also riding AI momentum.
• Within large caps, a slight overweight to growth is maintained, though value could also have a good year in a supportive economy.
• The equity overweight is diversified across large cap, small cap, and emerging markets.