Foreign investors are also frequently discussing AI. How do you view the market situation in 2026?

Spring Festival holiday enters its last day, with the A-shares market still closed. Discussions on “how to invest this year” and “market outlook for the year” have already returned to investors’ focus.

The reporter has reviewed investment outlooks from multiple institutions including Schroders Investment, Blackstone, Pictet Asset Management Switzerland, and UBS Wealth Management for 2026. These cover various areas such as gold and commodities, U.S. stocks and AI themes, private assets, global multi-asset allocation, and Asian fixed income.

From the statements of these institutions, the keywords for 2026 can be summarized into three dimensions: First, AI-driven productivity improvements and technological revolutions are still in the early stages, with a high consensus around long-term tracks involving data, electricity, and hardware supply chains; Second, on the macro level, growth remains resilient but uneven, with U.S. earnings expectations still solid, but valuation concentration and policy uncertainties requiring investors to focus more on diversification and selection; Third, in an environment where interest rates peak and decline, and geopolitical risks rise, safety cushions in multi-asset portfolios become more important. Gold as a anti-fragile allocation and Asian bonds with lower volatility and correlations are frequently mentioned.

Looking back at these judgments during the Spring Festival window, it appears that foreign investors prefer to understand 2026 through a “structural opportunity + safety cushion allocation” approach: not simply betting on a single theme, nor easily making a fully optimistic or pessimistic conclusion, but emphasizing leaving enough defensive space outside AI and technology-driven growth sectors.

Foreign Perspective on the “Long Bull Main Line” — AI

Among many foreign institutions, the most frequently mentioned keyword is AI. In Blackstone’s 2026 investment outlook, AI investment and productivity enhancement are listed as one of the primary trends shaping the current market landscape. They emphasize that data centers, electricity, chips, and connectivity are entering a sustained multi-year capital expenditure cycle, mainly driven by corporate cash flow rather than high leverage, serving as the foundation for future productivity gains and investment opportunities.

Blackstone sees AI not only transforming profit paths in the tech sector but also penetrating broader real economy sectors through private equity, infrastructure, and other channels. Opportunities are not limited to a few leading companies in public markets.

UBS Wealth Management’s investment director office takes a more direct view on stock market pricing, noting that the software industry faces ongoing uncertainty under AI impact, with competitive landscapes possibly rewritten, raising doubts about growth and profitability of some companies. Recently, software stocks have experienced significant corrections, which could provide more attractive entry points for long-term value investors.

Meanwhile, UBS believes that the tech hardware sector, represented by smartphone manufacturers, has already fully reflected optimistic expectations due to product refresh cycles. The current 12-month forward P/E ratio is significantly above the 5- and 10-year averages, warning investors to remain cautious about potential slowdown.

In overall allocation, UBS maintains a neutral stance on the U.S. IT sector but rates AI themes as “attractive,” emphasizing that AI-related opportunities extend beyond traditional tech indices into finance, healthcare, utilities, and other industries.

The macro assumptions provide the backdrop: UBS expects the Federal Reserve to cut interest rates twice in 2026, by 25 basis points each time, with monetary and fiscal policies jointly supporting the U.S. economy. With productivity gains, U.S. corporate earnings are projected to grow about 12% in 2026, with the S&P 500’s target level for mid-2026 and year-end raised from current levels. The combination of “earnings growth + declining interest rates” forms a favorable scenario for foreign institutions to bet on.

Blackstone’s view aligns with this, listing “moderate but uneven growth,” “slowing inflation,” and “declining global capital costs” as three other key trends. They believe that falling borrowing costs and the release of pent-up deal demand are driving a recovery in deal activity, especially in private equity, where the number of deals over $1 billion in 2025 nearly doubled year-over-year, with valuation differences providing relative advantages for private assets.

Pictet Asset Management’s senior multi-asset investment manager Guo Shaoyu reviews the 2025 market narrative, summarizing the year’s emotional shifts from American exceptionalism to the view that the U.S. is an uninvestable market, then back to fundamentals of industry and corporate health: early in the year, U.S. stocks continued their multi-year rally, viewed as an exception, with companies enjoying high short-term valuation premiums.

Later, concerns over tariffs, geopolitics, and policy uncertainties quickly intensified, evolving into a view that the U.S. was uninvestable. Market risk pricing for the dollar, U.S. Treasuries, and U.S. stocks became misaligned. During this phase, Pictet reduced U.S. debt holdings and increased U.S. equities, believing that the operational quality of U.S. companies had not slowed down, and macro-micro mispricings created opportunities.

By mid-2022, as U.S. policies shifted from tariffs to supporting business and tech sectors, and as AI and tech companies’ earnings reports confirmed industry health, the firm shifted its focus from macro to micro, reallocating funds into AI, tech hardware, and long-term growth themes.

Under this framework, Pictet divides its multi-asset investments into three pillars: long-term growth themes, cyclical opportunities, and sustainable stable income. The long-term growth segment focuses on AI-driven supply chains, including wafer foundries, memory, and semiconductor equipment in Taiwan, Korea, and Japan—key links in the global supply chain—while also paying attention to China’s potential in mining, rare energy, and downstream AI applications.

Cyclical opportunities are more concentrated in financials, defense, and some commodities. AI and energy transition require large, sustained capital formation, with banking and capital markets expected to find new growth opportunities amid regulatory easing. Defense, military, and scarce resources are seen as directly related to national security, with capital expenditure and order growth highly certain amid increasing geopolitical tensions.

Regionally, Pictet highlights Japan, which already plays an important role in manufacturing supply chains. If Japan’s monetary and fiscal policies further shift toward expansion, it could resonate through heavy industry, trading companies, and domestic consumption, making it a market to watch in 2026.

Across these narratives, the “long-term bull main line” presented by foreign investors shares similar contours: the U.S. AI and earnings cycle remains central in the medium term, but sector and company differentiation is accelerating. Betting on a single index or a few leaders is no longer sufficient to cover the entire theme; meanwhile, Asia’s advantages in hardware, exports, and demographics are elevating its role in the AI industry chain and global growth map.

Seeking “Safety Cushions” in Volatility: Gold and Asian Bonds

In terms of major asset classes, Schroders senior portfolio manager James Luke emphasizes gold. In 2025, gold prices hit 45 record highs, with a 65% increase, surpassing the performance of the 2000s bull market, comparable only to early and late 1970s.

He notes that current geopolitical and fiscal environments bear many similarities to the breakdown of the Bretton Woods system: monetary systems under pressure, White House pressuring the Fed to cut rates, and highly concentrated U.S. stocks. Differences include that today’s global fiscal fragility far exceeds that of the past, with more pronounced U.S. political polarization and wealth inequality. China’s industrial strength and fiscal resources are far beyond the Soviet Union’s capabilities at that time. AI has become a new technological driver, and energy structures and oil dependency have changed significantly.

In this macro context, Schroders believes gold is evolving from a rate-sensitive cyclical hedge to a “anti-fragile” structural allocation in portfolios. They see only two scenarios for gold prices to reach structural highs: either geopolitical and fiscal risks are substantially resolved, creating a new stable order; or demand is fundamentally discredited, with undeniable saturation. Currently, neither scenario is likely in the short term.

Notably, China’s role in this gold bull market is underappreciated. The Chinese central bank’s gold reserves account for about 8% of its assets, with the rest mainly in USD and other reserve currencies. Under future sanctions risks and U.S. debt credibility issues, this ratio is considered low. On equities, gold mining stocks in 2025 had ROIC exceeding the S&P 500, with significant profit margin improvements, still trading at a discount to physical gold, with potential ROIC rising above 20%.

Beyond gold, Pictet emphasizes Asian fixed income and local currency assets as safety cushions. Co-head of emerging market corporate bonds Yang Xiaoqiang points out that the more optimistic global growth outlook is concentrated in emerging markets, especially Asia. Asian countries have upgraded exports from primary commodities to high-tech products, with regional trade share rising from about 46% in the 1990s to around 60% now. Under the AI and commodity cycles, Asia’s export advantage is expected to persist.

Furthermore, Asian countries have accumulated large dollar positions—foreign exchange reserves and bank assets—meaning dollar funds will eventually flow back into dollar-denominated assets. Asian dollar bonds are a key channel. Yang notes that after the high-yield real estate defaults in China in recent years, default rates in Asian high-yield bonds have fallen significantly, with credit upgrades outnumbering downgrades, and corporate fundamentals stabilizing. Despite overall narrowing of global credit spreads, current yields make Asian corporate bonds relatively inexpensive, and lower onshore financing costs plus reduced net supply further support Asian dollar bond performance.

From a diversification and risk-hedging perspective, Pictet suggests that Asian local currency bonds, especially RMB bonds, have lower volatility than U.S. Treasuries and lower correlation with global risk assets, offering potential for macro risk hedging and building “new safe assets.” If hedged back to USD, their yields are comparable to U.S. Treasuries but with advantages in volatility and portfolio diversification.

(Article source: Cailian Press)