Credit allocation in 2026: Strategies, trends and client expectations that asset managers need to know about

The evolving landscape of the asset management industry is being significantly shaped by client demands for credit and the integration of artificial intelligence (AI). John McCareins, Chief Client Officer at Aberdeen Investments, offers insights into these trends, highlighting how they influence investment strategies and client engagement.

What is driving the increased focus on credit allocations?

McCareins notes that clients are leaning more heavily into credit, underscoring it as a core allocation. He observes a marked increase in fixed income flows - around $115 billion in recent months, with over $500 billion in the past year. This trend points to a purposeful move by investors towards more intentional credit exposures, focusing on credit quality and liquidity management.

A significant aspect of this shift is clients' curiosity about where fund managers can deliver additional alpha. At Aberdeen, credit remains a specialist expertise, which has been met with robust flows in credit markets spanning the UK, Europe, Asia, and globally.

Which trends are influencing client portfolios in today's market?

Looking ahead, McCareins highlights critical trends shaping client portfolios, especially across fixed income and credit markets. The industry's journey towards outcome orientation continues, moving from traditional benchmarks to more intentional sub-allocations and outcomes.

Insights from client focus groups reveal a growing interest in short duration credit, cross-over strategies in global credit, and enhanced yields from high-yield allocations. Moreover, clients are increasingly exploring the blending of public and private credit to optimise yield pick-up and liquidity profiles, aligning investments with their objectives.

How is AI transforming client engagement in asset management?

AI emerges as a significant theme across the industry, transforming how firms like Aberdeen engage with clients. McCareins shares that AI facilitates faster response times, personalised experiences, and a deeper capacity to communicate quality content. For Aberdeen, this involves deploying AI through a street view agent that interprets client sentiments on credit as an asset class, allowing for tailored and efficient client discussions.

Conversely, clients are also harnessing AI's power. Once overwhelmed by the volume of content, they now seek comprehensive insights using their own AI tools to distill essential information from Aberdeen's extensive research and perspectives.

This mutual advancement fosters a deeper understanding and more impactful dialogue between both parties.

In summary, the intersection of credit demand and AI's role presents both opportunities and responsibilities for asset managers. As the industry advances, understanding these elements will remain integral for firms and investors navigating the changing economic environment.