The last month has seen a flurry of perspectives published on the outlook for markets in 2026. Drawing on a sample of published reports from leading global asset managers, AUSIEX has identified five themes to help advisers assess forces expected to shape portfolio construction in the year ahead. 

These themes are not intended to be exhaustive, but rather to reflect some of the most consistent and investable ideas emerging from recent commentary.

Global equities extended their run higher through 2025, supported by resilient US growth, solid corporate earnings and a wave of AI-driven capital expenditure. However, asset managers are careful to stress that market strength was far from uniform: valuations in several segments remain stretched after a multi-year, technology-driven rally; dispersion across sectors and regions has widened, and the appeal of cash has faded as the Federal Reserve shifts to an easing cycle.

UBS Global Wealth Management and PIMCO each point to a supportive but more nuanced macro environment in 2026, where easing US monetary policy underpins growth in global shares but does not eliminate volatility. AI adoption is expected to keep broadening beyond a narrow group of mega-cap beneficiaries, increasing dispersion and bringing active management into sharper focus. Several managers also highlight the potential for a softer US dollar and a wider opportunity set outside US equities, alongside a renewed role for high-quality fixed income as yields remain structurally higher. 

Taken together, these views suggest 2026 may reward disciplined diversification, active risk management and a more deliberate approach to portfolio construction. 

To bring these themes to life, AUSIEX has selected three insights (as quotations) that capture the thinking of fund managers.

THEME 1: AI as a macro force

AI is becoming a genuine macro force, influencing growth, productivity and equity leadership. Fund managers see this widening impact as creating opportunities not only in the US, but increasingly across developed and emerging markets exposed to the AI supply chain.

• Active approach to AI thematic: “The AI buildout is dominated by a handful of companies whose spending is so large that it has a macro impact. We stay overweight US stocks and the AI theme, supported by robust earnings expectations. The capex may pay off overall even if not for individual companies. The next phase may be more about energy and resolving bottlenecks … the AI theme will become an active investment story of identifying new winners as AI revenues spread across the economy.” – BlackRock
• Selective equity exposure: “Both US value-oriented and non-US developed-market equities should benefit most over time as AI’s eventual boost to growth broadens to consumers of AI technology. Economic transformations are often accompanied by such equity market shifts over the full technology cycle.” – Vanguard
• Invest in transformational innovation: AI and technology have been key drivers of global equity markets and should fuel further gains in 2026. While being mindful of bubble risks, allocating up to 30% of a diversified equity portfolio to structural trends including AI, longevity, as well as power and resources, is recommended.” – UBS Global Wealth Management 

THEME 2: The ex-US opportunity 

Managers consistently highlight the case for broadening global equity exposure in 2026. Supportive policy settings, improving fundamentals and more attractive valuations in several offshore markets, including Europe and key Asian economies – such as Korea, Taiwan, and China – are identified as offering potential diversification and access to growth themes at comparatively favourable entry points.

• Focus on tech in emerging markets: “We also see opportunities to diversify globally. Central banks in emerging markets (EM), having established stronger monetary policy frameworks, now have more flexibility to ease policy and stimulate domestic demand, potentially supporting EM equities. Specifically, we see attractive opportunities in Korea and Taiwan, which offer exposure to the tech sector at cheaper valuations, and China.” – PIMCO 
• Bullish on the Eurozone: “Markets 360’s most pronounced non-consensus view is on the eurozone, where the team expects activity to outpace market expectations. It projects 2026 GDP growth of 1.5%, reflecting confidence that fiscal stimulus – primarily in Germany – will be implemented swiftly and prove more effective than consensus estimates suggest.” – BNP Paribas
• Seek opportunities in China: “China’s tech sector stands out as a top global opportunity. Strong liquidity, retail flows, and earnings expected to rise to 37% in 2026*, should sustain momentum for Chinese equities. Broader Asian exposure, in particular to India and Singapore, could provide additional benefits for investors seeking diversification, as could emerging markets.” – UBS Global Wealth Management

THEME 3: Fixed income returns as a core portfolio anchor

After years on the sidelines, bonds are firmly back in focus, with higher yields restoring both income potential and defensive value. Managers highlight high-quality duration and active credit as central to portfolio construction in the year ahead.

• Selective credit looks compelling: “With yields structurally higher, high-quality duration and selective credit are compelling now … fixed income is again the centre of the portfolio’s risk/return engine.” – PIMCO
• Bonds are back: “We maintain our secular view that high-quality bonds (both taxable and municipal) offer compelling real returns given higher neutral rates. Returns should average near current portfolio income levels*, a comfortable margin over the rate of expected future inflation. That’s the primary reason why bonds are back, regardless of what central banks do in 2026. Importantly, US fixed income should also provide diversification in a world where AI disappoints leading to lower growth.” – Vanguard
• Active fixed income in the driving seat: “The new rate regime means investors should rethink fixed income exposures – not as passive complements to equities, but as active drivers of diversification and carry.” – BlackRock

THEME 4: Diversification requires an active approach

With traditional diversification proving less reliable, managers emphasise a more deliberate, active approach to risk. High-conviction strategies, real assets and diversified income streams are seen as key to building resilience in 2026.

• Manager skill will shine again: “We don’t see easy passive diversification options in this environment. We think investors should focus less on spreading risk indiscriminately and more on owning it more deliberately – in short, a more active approach. We think high-conviction strategies like private markets and hedge funds pair diversification with strong return potential, in our view. And much of their performance is idiosyncratic, allowing manager skill to show through.” – BlackRock
• Enhance diversification and inflation protection: “Ultimately, 2026 may reward investors who embrace today’s macroeconomic environment: leaning into high quality fixed income as rates decline, selectively adding real assets for resilience amid geopolitical and inflation risks, and identifying undervalued equity sectors amid a concentrated market. In a world where uncertainty persists alongside optimism, thoughtful portfolio construction will be key.” – PIMCO
• Seek diversified income: “Income-seeking investors should diversify, by blending quality bonds and higher yielding strategies with income-generating equities and structured investments. This should help generate yield and manage risks associated with tight credit spreads and market uncertainties.” – UBS Global Wealth Management

THEME 5: Rethinking 60:40 with alternatives 

The classic 60:40 mix is being reconsidered as investors seek sturdier sources of diversification and income. Allocations to alternatives – from private markets to hedge funds and infrastructure – are emerging as key levers for stronger risk-adjusted returns in 2026.

• Look beyond traditional diversifiers: Traditional diversifiers like long-dated bonds offer less potential portfolio ballast. This environment calls for seeking truly idiosyncratic return sources, such as private markets and hedge funds, and staying tactical.” – BlackRock
• Active fixed-income opportunities: “With yields structurally higher, high-quality duration and selective credit are compelling now … investor opportunity lies in active credit selection, including securitised and private credit, as well as return-enhancing real assets and infrastructure.”– PIMCO
• Diversify with alternatives: “Adding alternatives, such as hedge funds and private equity, is a key part of effective diversification, and for many investors with an endowment style portfolio an allocation of up to 40% of total assets to alternatives can enhance risk-adjusted returns.” – UBS Global Wealth Management

The outlook for 2026 isn’t isolated to a single market narrative but instead takes into account factors that may create a dispersion of outcomes in the year ahead. Advisers who build those principles into portfolio construction may be better positioned to manage risk and capture opportunities for their clients.

* Forecasts are based on assumptions and are not guaranteed. Actual outcomes may differ.

Sources:

1. BlackRock 2026 Investment Outlook: https://www.blackrock.com/americas-offshore/en/insights/blackrock-investment-institute/outlook
2. Vanguard 2026 Economic and Market Outlook: https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/pressroom/press-release-vanguard-releases-2026-economic-and-market-outlook-121025.html
3. UBS 2026 Year Ahead: https://www.ubs.com/global/en/media/display-page-ndp/en-20251120-year-ahead-2026.html
4. PIMCO Investment Ideas for 2026: https://www.pimco.com/us/en/insights/charting-the-year-ahead-investment-ideas-for-2026
5. BNP Paribas Markets 360 and Global Outlook 2026: https://globalmarkets.cib.bnpparibas/global-outlook-2026-in-a-good-place/

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