Asset managers predict more diversified, selective portfolios amid uncertainty
Top asset managers say global economy is stable but faces challenges in 2026 including inflation, high debt and geopolitical tensions. Investment portfolios will become more diversified and selective, with AI investment booming but revenue models uncertain. China and Asia-Pacific remain attractive f
Leading asset managers have said the global economy is performing steadily, boosted by artificial intelligence investment, but faces significant challenges in the coming year. Speaking at an industry event, executives highlighted risks from high interest rates, sovereign debt and geopolitical tensions, and predicted investment portfolios would become more diversified and selective.
Tobias C. Pross, chief executive of Allianz Investment, said central banks remain focused on curbing inflation, which has pushed up interest rates. He warned investors to be particularly cautious about excessive leverage and sovereign states with high debt and low growth.
Peter O'Feld, chief executive of Schroders Investment Group, said geopolitical issues are driving inflation and increasing government spending, which could affect fixed income and equity markets. He noted that current market stability is partly due to strong earnings in sectors outside technology, with US corporate profits not yet reflected in share prices. He said he remains bullish on equities but portfolios will become more diversified and selective.
Chris Hogbin, chief executive of Lazard Asset Management, said the shift from globalisation and low inflation to a multipolar world marked by trade wars and military conflicts requires changes in asset allocation and management. He noted that demand for AI far exceeds supply, with companies spending trillions of dollars annually on AI, but revenue models remain highly uncertain. He said investment decisions need to be more selective. Hogbin added that China's economic cycle differs from others and that it has many strong companies in technology, healthcare and advanced manufacturing, which should offer long-term investment opportunities.
Karin van Baardwijk, chief executive of Robeco Investment Management, said China and the Asia-Pacific region will continue to attract international capital next year, with many assets worth investing in. She expressed concern about whether China's economic growth can translate into investment returns, noting that the country's monetary policy and inflation environment are increasingly diverging from those of Europe, the United States and Japan. While yields in China are relatively low, she said different interest rate cycles can offer opportunities within a global portfolio.