SKN | Utilities in 2026: Goldman Sachs’ Framework for Defensive Allocation

Key Takeaways:

• Goldman Sachs’ outlook for utilities in 2026 emphasizes stability and earnings visibility in an environment of uneven growth and persistent macro risk.
• Regulated cash flows and pricing mechanisms make select utilities relevant for capital-preservation-oriented portfolios.
• For HNWIs, the value lies in disciplined positioning, not broad sector exposure.

Goldman Sachs’ strategic positioning around utilities for 2026 reflects a broader institutional shift: renewed interest in businesses that offer predictability over narrative. In a market increasingly defined by valuation dispersion and geopolitical uncertainty, utilities are being reassessed not as passive yield vehicles, but as structural stabilizers within diversified portfolios.

Why Institutions Are Revisiting Utilities

Utilities have traditionally been viewed as low-volatility income assets. What has changed is the context. Higher-for-longer interest rates, uneven economic momentum, and rising political risk have increased the premium on earnings durability.

Goldman’s framework highlights utilities with:

• Strong regulatory visibility
• Disciplined capital expenditure programs
• Balance-sheet resilience
• Clear mechanisms for cost recovery

The focus is not on the entire sector, but on companies where governance quality and capital discipline reduce downside asymmetry.

Utilities as a Risk-Mitigation Tool, Not a Return Engine

For sophisticated investors, utilities are rarely positioned as growth assets. Their relevance lies elsewhere: volatility dampening, income stability, and structural diversification.

In Swiss and cross-border private banking structures, utilities often function as:

• Equity exposure with defensive characteristics
• Complements to fixed income allocations
• Buffers against cyclical drawdowns in higher-beta sectors

Goldman’s strategic approach reinforces this logic: utilities are not meant to outperform in bull markets, but to preserve portfolio integrity when macro conditions become less forgiving.

The Discipline of Selectivity

The central message for 2026 is selectivity. Utilities with excessive leverage, political exposure, or poorly structured regulatory environments carry hidden risks. Institutions are therefore filtering aggressively between:

• High-quality regulated operators
• Capital-intensive utilities with weak governance
• Infrastructure platforms with unclear return frameworks

For HNWIs, this underscores an important distinction: exposure to the theme may be justified, but only when aligned with strict quality and structural criteria.

Strategic Takeaway for Wealth Holders

Goldman Sachs’ positioning on utilities for 2026 should be read less as a tactical call and more as a signal about how institutional capital is being structured. Predictability, governance, and downside protection are again being priced as premium attributes.

For globally structured portfolios, utilities can play a measured role—but only when integrated deliberately alongside liquidity planning, jurisdictional diversification, and long-term capital preservation objectives.

For a confidential discussion regarding how defensive equity themes fit within your Swiss or cross-border banking structure, contact our senior advisory team.

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