The first-quarter inflation bump is behind us, but the risks of a monetary policy error and electoral shocks have risen.

While we believe the fundamental economic outlook for the next 12 – 18 months remains positive for risky assets, the potential for monetary policy errors and election-related volatility overshadows the coming months. These risks prevent the AAC from taking a more overweight view on risky assets, and keep us focused on quality assets and portfolio balance.

Close U.S. Elections Have Tended to Cause Fourth-quarter Market Volatility

AAC 3Q 2024

Source: Bloomberg, Neuberger Berman. Close election years: 1952, 1960, 1968, 1976, 1980, 2000, 2004, 2008, 2012, 2016 and 2020. Predictable election years: 1956, 1964, 1972, 1984, 1988, 1992, and 1996. Nothing herein constitutes a prediction or projection of future events or future market behavior. Historical trends do not imply, forecast or guarantee future results. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed or any historical results. Investing entails risks, including possible loss of principal.


  • The AAC has retained its at-target overall view on equities, and its overweight view on higher quality U.S. small and medium-sized companies.
  • We anticipate further broadening of equity-market performance, but heightened monetary policy and political risk in the second half of the year prevents an upgrade to a general overweight.
  • We believe Japanese equities have structural support, and that an incipient rebound in manufacturing and other cyclical parts of the global economy could begin to favor European and certain emerging markets over the coming months.

Fixed Income

  • The AAC made no changes to its fixed income views.
  • We maintain an underweight view on cash, preferring to lock in yields in anticipation of a decline in cash rates.
  • Our overweight view on investment grade reflects a general bias toward quality.
  • We favor the two- to seven-year part of the curve; absent a substantial growth slowdown, debt sustainability concerns make us cautious on longer-dated bonds.

Real and Alternative Assets

  • The AAC made no changes to its real and alternative asset views.
  • The AAC continues to view commodities as a useful hedge against potential inflation and geopolitical shocks.
  • We are cautious on core private real estate, but this is offset by what we see as abundant market-dislocation opportunities in the value-add and opportunistic sectors, and particularly in real estate secondaries.
  • We maintain our longstanding view that outsized rewards are available in private equity secondaries and co-investments, but primary private equity buyouts are also beginning to look more attractive as policy rates peak and exit activity looks set to pick up.

Market Views: Based on 12-Month Outlook for Each Asset Class

AAC 3Q 2024 

As of 3Q 2024. Views shown reflect near-term tactical asset allocation views and are based on a hypothetical reference portfolio. Views on private market assets reflect the Asset Allocation Committee’s views on the future return potential of new cash commitments, not the future return potential of existing investments. Nothing herein constitutes a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. See disclosures at the end of this publication, which include additional information regarding the Asset Allocation Committee and the views expressed.

About the Asset Allocation Committee

Neuberger Berman’s Asset Allocation Committee meets every quarter to poll its members on their outlook for the next 12 months on each of the asset classes noted and, through debate and discussion, to refine our market outlook. The Committee has an average of 30 years’ experience and covers a wide range of our market and research capabilities.