It’s 2026, and everyone wants a peek into what the year might bring. Good news? Bad news? Both?
No one has a crystal ball—but we asked four fund managers where they see opportunities, where their highest conviction lies, and what could go wrong this year.
I asked the same five questions to all of them and kept their answers verbatim — to preserve their originality and not lose anything in translation. I’m presenting them in alphabetical order by surname.
Hopefully, this gives you fresh perspectives—and maybe highlights a few blind spots you didn’t know you had.
Wai Lee, Ph.D., Senior Portfolio Manager and Head of Systematic Research, Allspring Global Investments
I am a portfolio management team member of the Allspring Global Equity Enhanced Income Fund and also the head of systematic research with 30 years’ experience.
What’s your base‑case outlook for 2026 — and what’s the single biggest driver behind that view?
We are selectively constructive for global equities that attractive returns remain achievable through stock selection focusing on income and earnings rather than just market beta when elevated valuations may limit broad multiple expansion. With fundamentals intact and inflation normalizing, stocks with reliable income, strong balance sheets, and disciplined capital allocation should provide differentiated outcomes versus the market’s concentrated growth exposure.
Where is your highest‑conviction opportunity for 2026 — and how are you expressing it?
We express our outlook through a risk-balanced global equity income portfolio with index option overlay to amplify income in achieving total return. We particularly like selective opportunities in software, pharmaceuticals, and European banks with supportive fundamentals, attractive valuations, and momentum. Given the challenges of narrow market leadership, we rely on disciplined, balanced risk management and active stock selection to deliver resilient outcomes.
Name one overlooked opportunity you think will beat the exciting stuff in 2026. Why now?
Selective high‑quality software companies that were de‑rated in 2025 amid fears that AI would structurally disrupt their business models are well positioned to build AI agents, enhance labour productivity, and reduce costs, strengthening their competitive edge. The sharp momentum gap between chipmakers and software has created an attractive entry point, with re-rating likely as earnings improve and AI adoption becomes embedded rather than speculative. Companies demonstrating productivity gains and resilient profitability should regain market leadership.
Which theme is consensus for 2026 but you think could disappoint — and why?
The indiscriminate “buy everything AI” trade could disappoint. AI will remain a dominant narrative, but parts of the ecosystem already price in flawless execution and uninterrupted demand. Rising costs, intensifying competition, and heavy capital requirements will widen the gap between winners and losers, making narrative‑driven exposure vulnerable. The passive “buy anything in SMID” mentality is also prone to disappointment. While some small‑cap non‑earners have rallied on hopes of monetary easing and AI‑driven upside, success requires active selection focused on tangible fundamental delivery—not just AI‑linked optimism.
What could go wrong in 2026?
Constraints to the Federal Reserve’s ability to ease even as growth slows, including U.S. fiscal deterioration, government borrowing needs, and tariff policy uncertainty can keep rates higher for longer while earnings expectations prove too optimistic would be disruptive. After global stocks returned almost 80% in last 3 years and modest pullbacks trigger “bubble” headlines in the news, correction could be more self‑inflicted by profit‑taking than driven by weakening fundamentals.
Lim Yuin, Chief Investment Strategist, Lion Global Investors
I am the Head of US & European Equities and Investment Strategist at Lion Global Investors with 19 years of asset management and securities experience.
What’s your base-case outlook for 2026 — and what’s the single biggest driver behind that view?
We are optimistic about 2026. Global growth should remain robust, supported by accommodative financial conditions, fiscal stimulus, and strong AI-related capital expenditure. The single biggest driver is the AI investment cycle, which underpins productivity gains and corporate earnings visibility, even as inflation stays slightly above target in some economies.
Where is your highest-conviction opportunity for 2026 — and how are you expressing it?
Our highest conviction for 2026 is Singapore equities. The medium-term Singapore equity story remains compelling, underpinned by structural drivers such as safe-haven fund flows, a positive industrial cycle, and liquidity tailwinds from ongoing market reforms. Initiatives like the S$5 billion Equities Market Development Programme, dual-listing bridge with Nasdaq, and the Value Unlock Programme are enhancing market depth and corporate governance, attracting strong foreign inflows.
Singapore-listed corporates also stand out for their ability to raise dividends above pre-pandemic levels, positioning the market defensively amid global uncertainty. Combined with robust export growth, solid macro fundamentals, and a strong Singapore dollar, these factors support sustained relative outperformance. We express this conviction through high-quality Singapore corporates with strong balance sheets, dividend growth potential, and exposure to industrial technology integration, which aligns with the broader AI-driven productivity theme highlighted in our outlook.
Name one overlooked opportunity you think will beat the exciting stuff in 2026. Why now?
Global risks assets such as equities have rallied strongly in 2025 and valuations are generally expensive relative to historical means. Selective investments into short-duration investment-grade credit with attractive all-in bond yields could provide returns and a hedge against an unforeseen sell-off in risk assets.
Which theme is consensus for 2026 but you think could disappoint—and why?
The “everything AI” trade may underwhelm in the near term. While AI is transformative, capex intensity, supply chain bottlenecks, and slower monetization could temper earnings delivery. Selectivity is key—owning firms that integrate AI for cost efficiencies rather than speculative growth stories.
What could go wrong in 2026?
A key risk is a reversal in the AI thematic trade amid concerns about overcapacity and excess capex. Renewed geopolitical tensions, or unexpected inflation could challenge the positive scenario. On the other hand, continued AI-driven productivity gains, successful market reforms, and resilient demand in Asia present significant opportunities for investors in 2026.
Anthony Raza, Head of the Multi-Asset Strategy, UOB Asset Management
I joined UOBAM in 2008 and spearhead efforts towards achieving the team’s objectives in monitoring global markets, forming the in-house view of likely market outlooks and performance, making investment recommendations, and developing and managing a range of asset allocation products. I have over 33 years of investment experience.
What’s your base-case outlook for 2026 — and what’s the single biggest driver behind that view?
We enter 2026 with a sense of optimism. Many of the policy risks that weighed on global markets in 2025 are gradually shifting into supportive tailwinds.
Fiscal policy is turning expansionary across major economies. In the US, fiscal headwinds from tariffs are turning into tailwinds from income tax cuts for individuals and capital expenditure tax credits for corporates. These are expected to boost consumption and investment. Europe is increasing defense and infrastructure spending, while Japan is rolling out consumer subsidies to support domestic demand. Meanwhile, China is widening its budget deficit to stimulate growth.
Monetary policy is also easing. The US Federal Reserve resumed its rate cuts in September 2025 and is expected to deliver two or three additional cuts in 2026.
Taken together, these measures point to a reacceleration of global growth in 2026.
Where is your highest-conviction opportunity for 2026 — and how are you expressing it?
Our highest-conviction opportunity is in equities, and there are four key reasons:
- Earnings growth is expected to grow at double digit rates in all the major regions.
- Equity performance has been more globally diversified in the past year than it has been in a decade, allowing more intriguing investment opportunities.
- Technological advancement and innovation goes beyond AI investments. Innovation is happening through all industries, increasing productivity and leading to stronger profit margins than previously imagined.
- AI technology is likely to be revolutionary and to change the way society and economies work. The best hedge people can make against the disruptions that may be caused by AI is to take ownership in the companies leading the disruption, and make sure one has ownership of the future robots.
As such, we are shifting our global equities positioning from a neutral level to a slight overweight. In particular, we think Asia continues to benefit from good domestic growth and is now less dependent on exports to the US for its growth. In addition, Asia’s valuations are also more attractive, its currencies are undervalued and likely to appreciate, and China has turned from a drag on Asian markets to a leader and driver of Asian equity performance.
We are also shifting from a neutral to positive outlook on the US market. It remains the most efficient with profit margins improving again beyond expectations, driven by technology innovation and productivity gains.
Name one overlooked opportunity you think will beat the exciting stuff in 2026. Why now?
We think the steepening yield curve is an important trend in 2026 which is being driven by the U.S. Fed rate cuts on the short end of the yield curve while reducing recession risks is keeping the long end of the yield curve up. Steeping yield curves are good for financials, cyclicals and small caps. These are not as exciting as tech stocks but have good room to perform in 2026.
What could go wrong in 2026?
We think that recession risks are moderating after being elevated last year. Nevertheless, we still think this is a key risk to monitor. There are many late cycle characteristics to the US economic cycle and valuations are at very high levels. US employment stalled in 2H25, and if it doesn’t pick up in 2026 then economists might start raising their odds of a recession again. But at the start of the year it does appear that tariff headwinds are turning into tax cut tailwinds and after surviving weak data in 2H25, the outlook is looking more solid.
Teh Hooi Ling, Portfolio Manager, Inclusif Value Fund
We manage a performance fee-only Asia Pacific value fund, Inclusif Value Fund, launched in July 2017. Prior to this, I spent three and a half years with another value fund for another three and a half years. Including my earlier career in journalism, I have been a student of stock markets for more than 30 years.
What’s your base-case outlook for 2026 — and what’s the single biggest driver behind that view?
We do not place much emphasis on predicting how markets will perform in any particular year. Instead, our focus is on where the opportunity set is most attractive from a valuation and fundamentals perspective.
This leads us to a selective outlook. Some markets, such as the USA and Taiwan, are priced for very favourable outcomes, leaving little room for disappointment. Others, such as most parts of Asia, continue to trade at levels that already reflect weak assumptions despite resilient balance sheets and cash flows.
Where is your highest-conviction opportunity for 2026 — and how are you expressing it?
We focus on markets where valuations already reflect very conservative assumptions, particularly in countries that have been out of favour for an extended period, such as Hong Kong and ASEAN.
At the same time, we are also interested in markets where recent returns have been strong, but valuations remain reasonable due to positive structural developments. For example, Japan, Korea, and Singapore have introduced their own versions of “value-up” programs, supporting improved corporate governance and capital allocation standards. Vietnam is poised to graduate from a frontier to an emerging market, having recently been reclassified by FTSE. This milestone is expected to draw greater institutional attention and gradually enhance capital flows.
We maintain relatively large weights in these countries, while selectively investing in companies where valuation remains undemanding relative to balance sheet strength and cash flow sustainability.
Name one overlooked opportunity you think will beat the exciting stuff in 2026. Why now?
We believe that Asia, except for some expensive markets such as Taiwan, remains an overlooked opportunity. This view is reinforced by the broader context: Asia accounts for roughly 35–40% of global GDP, yet its weight in global equity indices such as the MSCI ACWI is only around 15%. The divergence suggests that Asian equities, particularly outside the largest companies, remain underrepresented and largely overlooked by global investors, despite the region’s economic significance.
In addition, in certain Asian markets (including Taiwan, Korea, and Japan), strong index returns over the past year have been concentrated in a small group of large-cap stocks. Meanwhile, smaller companies, especially those outside the major indices, continue to trade at undemanding valuations, presenting an asymmetric risk-reward opportunity for selective investors.
Which theme is consensus for 2026 but you think could disappoint—and why?
Two consensus themes we are cautious about for 2026 are Artificial Intelligence (AI) and precious metals such as gold and silver.
Technological breakthroughs have historically created immense societal value, but only a small subset of companies capture significant economic returns. Many AI-related businesses are priced for perfection, meaning any deviation from expectations could lead to disappointing outcomes. The sector is also absorbing massive capital expenditures on initiatives that are inherently difficult to value. From a value investing perspective, these dynamics leave little margin for error.
Gold and silver, which performed strongly in 2025, present a similar concern. A big chunk of their returns is often driven by macro variables or narratives rather than underlying business fundamentals, and as such, they do not align naturally with value investing principles.
What could go wrong in 2026?
Investors should recognise that markets will inevitably experience crashes, and such episodes are almost impossible to forecast accurately. This uncertainty is the price equity investors pay to earn the equity risk premium.
That said, certain risks merit attention. Geopolitical tensions, including tariffs, trade disputes, or regional conflicts, can disrupt investment flows or supply chains. Likewise, a sudden loss of confidence in high-valuation themes, such as AI or other popular technology trades, could trigger repricing, even though the timing of such events cannot be predicted.
Ultimately, risk is an inherent part of equity investing. Discipline, valuation awareness, and patience remain the most reliable tools for navigating uncertainty and achieving sustainable outcomes.
Final Thoughts
Four managers — some agreements, some divergences. AI hype and expensive US valuations are common concerns, but Anthony sees US equities positively, citing innovation beyond AI and productivity gains pushing profit margins higher. Nearly all point to overlooked opportunities in Asia — whether broadly or more focused in Singapore, China, Japan, South Korea, and Vietnam.
No one here is selling you certainty. What they’re offering are different perspectives and the reasoning behind them. This can help you think through different angles and possible scenarios for 2026 — so you can position accordingly.
Disclosure: This is not sponsored content. Views expressed are those of the individual contributors and do not represent their institutions. Nothing here constitutes financial advice.
