Looking ahead to the new year, 2019 is shaping up to be another challenging one for institutional investors looking for strategies to generate sufficient returns to meet their current and future obligations.

Navigating the many variables — from rising interest rates and weakening global growth to threats of trade wars and the possible return of higher inflation — will keep even the most experienced investor awake at night.

While it’s certainly necessary for investors to stay on top of the day-to-day developments that can affect their strategy, they may enjoy a bit more sleep by taking advantage of some broader themes highlighting the forces we believe are going to shape economic and market dynamics in the years ahead.

Read: Most investors expect bull market to end, but planning minimal portfolio changes: survey

It can be difficult at the best of times to predict economic growth rates, but with so many unknowns currently in play, it’s particularly challenging.

For instance, while overall global growth is expected to weaken slightly in 2019, the resolution of key international trade tensions — notably between the United States and China — could boost that growth. Meanwhile, U.S. growth will likely soften this year as the impact of tax cuts and government spending increases begin to fade, but consumer and business spending should continue to support the economy even as interest rates are expected to rise.

Europe should see growth at reasonable levels, but it could be affected by the considerable uncertainties around Brexit and Italy, as two examples, while growth in emerging markets will likely continue at recent rates with the possibility of stronger growth when, and if, trade tensions ease.

Read: As Brexit draws closer, what’s noise and what’s not for institutional investors?

When it comes to equities, an improvement or worsening in trade tensions could produce substantial gains or losses, with rising bond yields a possible brake on any gains, especially if coupled with higher inflation.

The impact of all of this will, of course, be different for each investor, depending on their own specific needs, objectives and constraints. But we’ve identified four key themes for 2019 that rise above the day-to-day turmoil. We believe they’ll have a considerable effect on the investment landscape, regardless of each investor’s unique situation.

1. Late-cycle turbulence

There’s growing evidence of credit overextension, with outstanding debt increasing and the quality of that debt decreasing. At the same time, several factors are expected to continue to buoy equity markets in the near term, including the positive macroeconomic backdrop, a number of government’s pro-business policies and high levels of business optimism in key global economies.

Read: Revisiting the case for investing in emerging market equities

While the collision of contrasting equity and bond market tendencies could open up some tactical opportunities for investors, others will simply aim to successfully navigate their way through the rough waters. Whatever the situation, there’s merit for institutional investors in revisiting and stress-testing their strategic asset allocation, particularly as the threat of the return of inflation continues to loom over several economies.

2. Changing market participation

As central banks begin trying to deleverage their balance sheets after jumping in as significant providers of credit and liquidity after the 2008 financial crisis, and with commercial banks restrained by tougher banking regulations, it’s likely that borrowing money for investment or consumption will become more difficult for businesses and individuals, and will hamper economic growth.

Some investors have found opportunities by lending directly to businesses through private debt or acquiring private equity positions, but where an investor is considering this option, they must understand their tolerance for illiquidity and ensure they have a balance of private market investments that’s diversified across market segments, capital structures, managers and vintages.

Read: Navigating the trend towards passive investing

Other investors have added real value through active management in this environment of change, but that may not be appropriate for everyone. For investors that prefer something other than the traditional active or passive management of their portfolio, an increasing number of investment strategies somewhere between those two extremes are a good option.

3. Global frictions

It’s reasonable to ask whether the world has reached ‘peak globalization’ following decades of dismantling trade barriers and increasingly connecting the world’s major economies. This is especially apparent in the ongoing trade frictions between the United States and China, the world’s two biggest economies, and in the continuing discussions about the future trading relationship between the United Kingdom and the European Union after Brexit.

If global trade begins to fall back from globalization’s previous gains, there could be greater divergence in investment returns across regions and countries. This will pose a particular challenge for those looking to invest in China because they’ll need to balance the risk of these investments with the existing opportunities for growth. Nevertheless, global economic divergence could create favourable investment opportunities for portfolio managers with global macroeconomic insight, but investors may need to review how currency risk is managed, as it could also produce higher volatility in currency markets.

4. Sustainability expectations

Investors are increasingly being urged — and in some cases required — to adopt a sustainable perspective when managing their portfolios, and institutional investors aren’t immune to this development. Fortunately, many institutional investors take a long-term perspective that’s an important part of successfully incorporating sustainability considerations into their strategies. Whatever their views on climate change, for example, there’s no doubt significant investment opportunities exist in businesses involved in the transition to a low-carbon economy.

Read: Canadian responsible investments surpass $2 trillion AUM: report

For institutional investors that haven’t incorporated sustainability into their portfolios yet, an effective and appropriate first step could be to appoint managers with strong environmental, social and governance credentials, and to consider including sustainability focused satellites in their equity portfolio.

Every challenge presents an opportunity, so with many challenges affecting investment strategies in 2019, there are at least as many opportunities for those with the foresight to find them and the courage and determination to take advantage.