Brian Ronayne, Head of Institutional and Liquidity Distribution for Federated Hermes, joined Phil Orlando, Chief Market Strategist for Federated Hermes, on the RIA Channel at BNY INSITE 2026 to discuss why 2026 is a unique year for investors and the evolving role of cash in investor portfolios.
Orlando highlights that 2026 brings together a Federal Reserve leadership transition with a midterm election year, a combination that has occurred only six other times in the past 93 years. He explains that historically, these years have seen a honeymoon period at the start, an air pocket during the middle, and a rally toward new record highs at the end of the year. With this in mind, Orlando favors a defensive posture heading into the middle of the year. He adds that the firm maintains a 6% overweight in equities and favors undervalued areas such as domestic large-cap value, small-cap growth and value, and emerging markets.
Ronayne emphasizes that cash has reemerged as an interest-earning asset class. Rather than viewing cash solely as a defensive holding, he believes that advisors should consider it a core component of asset allocation for all clients. He adds that cash can be used as an investment through traded money funds, potentially moving assets out of lower-yielding deposits.
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