Annual Investment Outlook 2026
SUMMARY
As 2026 begins, investors face a landscape defined by complexity and disruption. Developments in the AI space will continue to dominate market sentiment which, combined with shifting economic policies, will require a disciplined, open-minded approach.
Thanks to a programme of fiscal stimulus and moves from the Federal Reserve towards less restrictive policies, the US is looking more supportive of economic growth. Europe, meanwhile, is showing the green shoots of recovery. Along with potential Chinese measures adding momentum, the global growth outlook appears constructive.
Other themes to consider:
- The US is moving towards a more supportive policy environment, with anticipated interest rate cuts and fiscal stimulus likely to underpin consumer and business confidence, despite ongoing economic vulnerability following a year of heightened uncertainty.
- European growth is showing early signs of a cyclical upswing, led by declining inflation, supportive fiscal measures (including defence spending), and an improved energy outlook, though structural challenges persist.
- China’s growth resilience is under pressure from slowing domestic demand and persistent deflation, increasing the likelihood of further stimulus.
- The AI sector has reached an inflection point, with investors scrutinising the potential returns on infrastructure investment by technology giants. Market leadership is expected to shift from capital-intensive enablers to broad-based adopters of AI, making selectivity and an active management approach essential.
- Quality companies - those with robust profitability, consistent earnings, and prudent financial management - are attractive, especially as valuations are compelling relative to historic norms and the broader market.
- Recent geopolitical events, notably the US-led regime change in Venezuela, alongside ongoing credit market risks, highlight the necessity of maintaining diversified and defensively oriented portfolios to manage unexpected market disruptions.
This year’s Annual Investment Outlook examines these themes in depth, concluding with our core asset class views and potential market risks that reinforce the importance of a well-diversified multi-asset approach.
RISK DISCLOSURE
This document has been prepared for information only and is not intended for onward distribution. It is neither an offer to sell, nor a solicitation to buy, any investments or services. The information on this document does not constitute legal, tax, or investment advice. It does not constitute a personal recommendation and does not take into account the individual financial circumstances needs or objectives of the recipients. You must not, therefore, rely on the content of this document when making any investment decisions.