Schroder Investments today held its top ten forecasts for 2026. Keiko Kondo, the top director of Schroder Investments' Asia multi-asset team, said that entering 2026, investment will focus on portfolios that can drive long-term growth, including long U.S. stocks, Asian stocks, European banking and industrial stocks, global convertible bonds, Russell 2000 index, emerging market local currency-denominated bonds, gold, alternative energy, private equity assets, and short the U.S. dollar index relative to the euro.
Chen Siming, general manager of Schroders, said that 2025 is a year of global economic restructuring and market fluctuations. The shift in trade policy, the resurgence of growth momentum in Asia, and the investment boom in artificial intelligence have become key trends of the year. However, Schroders believes that 2026 will be about finding certainty amidst uncertainty, making good use of active management, and exploring opportunities in the policy-driven and unevenly paced global market to see more possibilities.
Kondo Keiko said that looking back at 2025, the accuracy of Schroders' top ten market forecasts is as high as 90%. The market story in 2025 is a series of resets, including tariff news, political changes and frequent fluctuations, which make investors feel uneasy, but the fundamentals still show resilience. Entering 2026, Schroders will focus on structural trends that can drive long-term growth and enhance the resilience of the investment portfolio.
Keiko Kondo pointed out that the U.S. economy remains strong, benefiting from solid consumer spending and real wage growth. The labor market is in a stable state of "low hiring and low layoffs." Although the employment data is slightly weak, this balance shows stability, not recession. Even though the inflation risk of Trump's policies still exists and tariff issues have attracted much attention, Schroeder believes that the phased implementation of trade measures makes the impact controllable.
Kondo Keiko believes that Schroders expects price pressure to rise slightly, but it is not enough to change the overall trend of slowing inflation. Because the U.S. economy continues to accelerate and inflation is within control, Schroders maintains a positive view on U.S. stocks and corporate earnings momentum continues. Although valuations are high, earnings expectations are still being revised upwards, becoming a key driver of performance. Therefore, it is recommended to continue to be long in U.S. stocks, but to diversify investments.
Kondo Keiko explained that there is a problem with the US S&P Index, that is, the proportion of the Seven Heroes is too high, but the profit has gradually dropped to 20~25% compared to the previous 50%, which will have an impact on the fluctuation of the entire index. Instead, the remaining 493 companies have begun to grow, gradually narrowing the growth gap. For safety and stability, half of the assets should be placed in the Seven Heroes and half in the 493 companies, or active managers should be sought for investment opportunities.
Asia’s AI growth momentum is strongAsia and emerging markets are gradually stabilizing. Keiko Kondo pointed out that China's economic activities have stabilized, and consumption and manufacturing are showing signs of recovery. Although China's rebound will not rely on traditional stimulus, but through improving consumer confidence and policy measures targeting consumption, this is a healthier and longer-term recovery.
Kondo Keiko believes that Asia's prospects continue to improve, and the technology industry has benefited from the acceleration of AI investment and the expansion of material infrastructure, especially the semiconductor and hardware ecosystems of South Korea and Taiwan. It is expected to continue to catch up in 2026, because Taiwan plays an important role and benefits from strong demand in the semiconductor industry, which is expected to drive the Asian technology industry to continue to benefit, while China's stock market is much cheaper than MSCI.
Kondo Keiko analyzed that the AI story is moving from infrastructure to the application stage, and is still in the early stages of the cycle. As investment spreads beyond very large companies, Asian hardware and semiconductors will significantly benefit, and this diffusion also means that after years of index concentration, the importance of active stock selection will return.
In Europe, Keiko Kondo believes that banking and industrial stocks have benefited from fiscal spending and defense demand. Although economic growth is moderate, corporate fundamentals are solid and valuations are attractive.
Kondo Keiko said that after a strong rebound in 2025, Schroders expects bond returns to be moderate in 2026 and prefers global convertible corporate bonds. Past experience has shown that convertible bonds can capture the upside potential of stocks while reducing the risk of fallbacks, and convertible bonds are a balanced choice between credit and stocks. They can maintain market participation while reducing volatility risks in an environment where growth is slowing but still positive.
Emerging market local currency bonds are also attractive. Keiko Kondo pointed out that as the Federal Reserve enters a cycle of moderate interest rate cuts, Asian central banks have further easing space to provide support for emerging market bonds, and attractive real income and improving fiscal conditions continue to attract capital inflows.
US dollar weakens, gold remains resilientSchroeder expects that the U.S. dollar will gradually weaken as interest rate differentials narrow, and global funds will begin to shift to other markets. Keiko Kondo pointed out that in the past, the U.S. dollar was the main hedging tool during its duration. Now investors are seeking more diversified allocations. De-dollarization is a gradual process and reshaping the investment portfolio.
Gold is still a strategic diversification tool, supported by the rebound in investment demand and the continued buying of emerging market central banks. Keiko Kondo believes that although gold is expensive, it still has room for growth. When central banks of various countries want to de-escalate their assets to the U.S. dollar, their first preference is gold. Therefore, the rise in gold is a structural factor, and investors will buy gold to diversify risks. Therefore, every time the gold price falls, there will be an influx of buyers. From a structural point of view, it is optimistic to be long gold.
Alternative investments focus on energy transition and private marketsKondo Keiko pointed out that as AI and electrification drive up global electricity consumption, Schroders expects alternative energy to continue to become a structural growth theme and is optimistic about investment opportunities in renewable energy, grid expansion and energy storage..
The private equity market also attracts funds and has shown resilience in the past cycle. Keiko Kondo believes that private equity and private equity are still important components of a diversified investment portfolio, providing long-term value creation and stable income potential. After a seemingly "just right" year, 2026 will require greater selectivity and active management. The market cycle is not over yet, but investors must see through the noise and focus on areas where earnings, valuations and structural trends are still consistent.
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