After a year dominated by geopolitical headlines and economic uncertainty, and marked by U.S. tariffs, asset managers are looking ahead to 2026 with cautious optimism. Overall, investment firms suggest that the U.S. economy will remain solid while Europe’s outlook improves, supported by market-friendly monetary policies from major central banks. Together, these factors should create an environment rich in opportunities, but one that also calls for a stronger emphasis on diversification.
When assessing the economic outlook, Anthony Willis, Senior Economist at Columbia Threadneedle Investments, expects solid growth in 2026. “We anticipate a rebound in activity in some European economies, with Germany particularly well-positioned thanks to the stimulus measures announced. China is expected to maintain its growth target at around 5%, while U.S. expansion should be broadly in line with this year. The UK’s growth prospects remain modest and not significantly different from those in 2025, although there is some scope for a slight deterioration,” Willis notes.
A Question of Resilience
“The global economy is undergoing a transition, not a slowdown. Global growth will moderate in 2026 but remain resilient as long as the economic cycle continues, driven by innovation and supportive economic policies. The technology wave is reshaping a multipolar world in which geopolitical and inflation risks have become more structural. These factors add to concerns stemming from fiscal vulnerabilities and valuation excesses, but AI-driven capital investment, shifts in industrial policy, and monetary easing should support activity and extend the cycle,” Amundi states.
Christian Schulz, Chief Economist at Allianz Gl, points out that “the global economy enters 2026 still constrained by the aftermath of trade wars,” with growth expected to ease only slightly to around 2.7%. The investment cycle driven by artificial intelligence, combined with proactive economic policies, will act as a stabilizing force. According to Schulz, “inflation in the United States will rise back above 3%, while pressures in Europe and Asia will be more contained, opening the door to interest rate cuts.”
He adds that 2026 will test institutional resilience, policy flexibility, and the ability to adapt to a more fragmented world. “Investors will need to pay attention to technological advances that will broaden investment opportunities beyond the U.S. technology sector and parts of Asia. Combined with more flexible monetary and fiscal policies, these factors should support global resilience despite challenges to pillars such as central bank independence and free trade,” he concludes.
“Although current market prices reflect a Goldilocks scenario, growth with contained inflation, we believe this is the least likely outcome for 2026. That said, markets may remain anchored to this optimistic assumption until labor market data show clear signs of stabilization. Ultimately, the combination of negative real rates globally, looser credit conditions, and a shift toward more expansionary monetary policies in an environment of still-persistent inflation suggests that inflationary growth is the most likely scenario for 2026. Overall, 2026 should offer investors significant opportunities, provided they are prepared to adapt to a wide range of outcomes, from limited recession risk to episodes of stagflation,” argue John Butler and Eoin O’Callaghan, macro strategists at Wellington Management.
Diversification in the Face of Challenges
Although geopolitical risks remain elevated, Schulz highlights that “attempts at de-escalation in the Middle East represent a positive development.” The United States and China will continue to lead the AI revolution, with spillover effects accelerating in other regions. Valuations in technology and certain less-regulated financial activities warrant caution, but “lower interest rates and moderate private-sector leverage reduce the risk of systemic instability.”
For DWS, the outlook for 2026 appears attractive, although the margin for error remains narrow. “Political headlines and geopolitical risks could trigger heightened volatility at any time. For this reason, a broadly diversified investment strategy, across both regions and asset classes, can help investors seize opportunities while remaining prepared for potential setbacks,” the firm adds.
This view on the importance of diversification is also shared by Amundi, which believes that long-term structural changes will continue to clash with short-term dynamics, keeping risk levels elevated while also reshaping opportunities as governments and companies seek to preserve trade and investment flows. “Our stance for 2026 is moderately constructive on risk assets, with greater diversification at all levels and a range of strategic hedges, such as alternative assets, gold, and selected currencies,” the firm concludes.
