Principal Asset Management
The latest research and outlooks in the ProAllocate library
- Thematics
AI infrastructure meets political reality
Principal Asset Management's Seema Shah argues that a sharp AI-stock sell-off, intensified by midterm election results and local opposition to data centers, reflects growing regulatory friction rather than an end to the AI investment cycle. She expects development to be redistributed and made more conditional, not halted.
- Macro
Beyond the election: Fundamentals still drive markets
Magdalena Ocampo argues that despite a larger-than-expected Democratic sweep in the 2026 US midterms, divided government points to legislative gridlock rather than policy change, limiting market impact. She contends markets will remain driven by growth, inflation, Fed policy and corporate earnings rather than the election outcome.
- Pensions
Abandonment risk and its impact on retirement savings
Principal Asset Management's Mike Reidy argues that "abandonment risk" — investors exiting retirement plans during market downturns — undermines long-term returns and heightens shortfall and longevity risks. He recommends behavioral nudges, auto-re-enrollment and professional guidance to keep savers invested through volatility.
- Pensions
Retirement ready: The power of target date funds
Mike Reidy explains why target date funds have grown past $5 trillion in assets, arguing their automatic glide-path allocation, professional management and simplicity make them an effective default retirement solution despite one-size-fits-all limitations and fees.
- Macro
U.S. midterm elections: Political shift, but limited market regime change
Seema Shah argues that the 2026 U.S. midterms, which gave Democrats control of Congress, produce political gridlock rather than a market regime change, limiting further fiscal expansion without resolving debt or inflation pressures. She expects attention to return quickly to pre-election drivers: AI investment, growth, Fed policy and earnings.
- Macro
October FOMC meeting: See you in December
Following the Fed's hold at 3.75%-4.00%, the author expects Chair Kevin Warsh to resume tightening given above-target inflation, anchored expectations and a resilient labor market, forecasting hikes in December and early 2027.
- Thematics
AI grows up: the race from hype to profits
The article argues that AI investing is shifting from broad thematic exposure to selective stock-picking, as roughly 70% of tech-index value already prices in future earnings growth. It contends investors must scrutinise adoption, monetisation and free cash flow to distinguish durable winners from overhyped names.
- Macro
October ECB meeting: A measured approach to policy remains appropriate
The ECB held rates steady in October but Principal Global Investors' Seema Shah expects another hike in December as an energy shock keeps inflation above target. The meeting was overshadowed by Christine Lagarde's announcement that she will step down early, in February 2027.
- Macro
Finding opportunities amid higher rates, AI disruption, and market concentration
In a panel discussion, Principal's Seema Shah, Rich Hill, Michael Goosay and Emily Foshag argue markets have adapted to higher-for-longer rates, with fixed income, equities and real estate offering compensated risk if investors prioritise selectivity and fundamentals. They caution that AI-driven market concentration and legacy portfolio biases toward low rates warrant reassessment.