As we enter 2026, a powerful combination of economic, technological, and geopolitical forces is set to shape the investment landscape.
In this outlook, we highlight the nine themes we believe will have the greatest influence on markets in the year ahead and identify the assets best positioned to benefit from them. Some themes represent the continuation of long‑running structural trends such as resilient global growth, the deepening reach of artificial intelligence, and the accelerating demand for electrification. Others mark a potential shift in the backdrop, including elevated geopolitical tensions, sustained defence spending, and growing concerns around currency debasement.
Together, these themes frame the opportunities and risks that we believe will define 2026 and guide how investors can build resilient, future‑ready portfolios.
Global economic momentum continues to be resilient, supported by ongoing fiscal and monetary stimulus and continued investment in the rollout of artificial intelligence. This expansionary policy backdrop should help sustain growth into 2026, while the deeper integration of AI into the global business ecosystem could drive meaningful gains in efficiency and productivity.
US equities are certainly expensive by some measures, but they are still within historic norms when valued against forecast earnings. Nonetheless, further upside is likely to have to come from earnings growth delivery – still the base-case due to the US tech-exceptionalism – rather than multiple expansion. We continue to see value in Japan, where expansionary fiscal measures, governance reform and monetary normalisation should offer support for equity valuations.
Target assets: Global equities; US equities (large and small caps); Japanese equities.
The Trump administration’s hard ball approach to international affairs has reshaped geopolitics as we know it. Flaring regional conflicts and an increasingly polarised world has left many nations – particularly the US’s historic NATO allies – their most vulnerable in decades. Meanwhile, the US’s uncertain actions and increasingly isolationist policies have raised questions as to the role of the dollar as a ‘haven’ asset.
Defence firms that have had order books bolstered by nations eager to expand their defence capabilities were a key beneficiary of this last year; while the equity of these companies is no longer as undervalued as it was 12 months ago, we believe that there is still further to run with real earnings growth to become the key driver of returns. Safe-haven assets – notably gold and silver – should also continue to benefit from rising demand on such a volatile global backdrop.
Target assets: European and US Defence stocks; Gold and Silver; Industrial metals.
“Safe-haven assets – notably gold and silver – should also continue to benefit from rising demand on such a volatile global backdrop.”
Last year, AI-driven performance was dominated by hyperscalers, with semiconductor manufacturers and other hardware suppliers benefiting from surging demand as investment in AI infrastructure accelerated. Attention is now turning to the next phase of AI development: adoption, integration, and subsequent productivity gains.
Software companies that can embed AI effectively into their platforms stand to benefit, alongside robotics and automation firms where adoption can deliver tangible efficiency improvements. These areas should also prove more resilient in the event of a correction in the AI hardware trade, with returns driven by usage and monetisation, and not propped up by cyclical capital spending.
Target assets: AI and Robotics Companies; Selected AI Software Producers.
“Attention is now turning to the next phase of AI development: adoption, integration, and subsequent productivity gains.”
M&A activity began to accelerate toward year-end and is likely to continue, supported in part by deregulation in the US. Strong equity markets and elevated valuations create a favourable backdrop for IPO issuance, with several prominent private companies expected to go public in the year ahead.
This is positive for private equity firms, enabling exits at attractive multiples, cash returns to investors, and the launch of new fundraising cycles. We believe the environment should also benefit strategies focused on corporate events, such as merger arbitrage and event-driven hedge funds.
Target assets: Merger arbitrage hedge funds; Investment banks benefiting from M&A and IPO deals; Private equity funds.
The healthcare sector enters 2026 on firmer footing, as policy uncertainty continues to ease, M&A activity gathers pace, and AI-accelerated innovation begins to yield results. After several years of underperformance, valuations remain attractive relative to the broader market, positioning the sector as a compelling alternative as investors reassess crowded positioning in technology and AI.
Within the sector, opportunities span both growth and defence. We expect Biotech and biopharma to offer attractively idiosyncratic return profiles, driven by innovation cycles and M&A, while more traditional healthcare names provide steady cashflows and defensive characteristics, making them valuable portfolio diversifiers, particularly in the event of an AI-led market correction.
Target assets: Healthcare equities; Biotech equities.
Following an exceptionally strong year for emerging market equities, the environment remains supportive for further gains. Valuations are reasonable, while economic growth across emerging markets is expected to meaningfully outpace their developed markets peers and should remain supported by lower US interest rates and a weaker US dollar.
Several Asian economies – including China, India, and South Korea – are positioned to benefit from the supportive macro backdrop and strong demand for AI-related technologies.
Target assets: Emerging market equities
Surging electricity demand from AI datacentres continues to drive long-term investment in power generation capacity, including nuclear energy. Simultaneously, the need for significant grid modernisation is spurring investment in power transmission infrastructure. The US grid, in particular, is outdated and requires substantial upgrades, though the investment need is global.
A broader shift toward more active fiscal policy in developed markets is paving the way for a renewed cycle of infrastructure investment, especially in energy and power. We think that together, rising structural demand and policy support create a durable tailwind for companies exposed to electrification, utilities, and the physical build-out required to support the next phase of economic growth.
Target assets: Electrification and electric utility stocks; Industrials; Real assets; Industrial metals.
Soaring public debt alongside loose fiscal policy are steadily eroding confidence in fiat currencies, strengthening the case for precious metals as long-term stores of value. Continued central bank gold buying, particularly across emerging markets, reinforces this trend and strengthens precious metals’ role as a portfolio anchor even after a strong rally.
This backdrop is being further exacerbated by an unsettled geopolitical environment, which continues to sustain demand for hard assets. Together, these forces reinforce the role of gold and silver as enduring stores of value and as protection against the long-term dilution of purchasing power.
Target assets: Gold, silver and other precious metals.
Corporate credit is trading at its tightest spreads since 2007, while yields have declined amid central banks’ rate‑cutting cycles. As a result, selectivity is particularly important when investing in credit this year. In our assessment, attractive opportunities can still be found through a bottom‑up approach to credit selection, with a preference for sectors where companies maintain strong balance sheets and low leverage, such as financials and commodities. We are more cautious on technology sector debt, however, due to the growing supply of corporate bonds issued by hyperscalers as they seek to finance rising AI‑related capital expenditures.
Target assets: Actively managed corporate credit strategies.
“Attractive opportunities can still be found through a bottom‑up approach to credit selection, with a preference for sectors where companies maintain strong balance sheets and low leverage”
Disclaimer: Certain statements included within constitute ‘forward-looking statements.’ These statements, which may include words like ‘believes,’ ‘expects,’ or similar expressions, are subject to numerous risks and uncertainties. Actual results may differ.
If you’d like to explore any of these themes further, or discuss how you can take advantage of these opportunities, please get in touch with us at info@bedrockgroup.com.
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This month we discuss a volatile end to an otherwise strong start to 2026, broad equity gains, extreme swings in precious metals, rising geopolitical tensions from Greenland to Venezuela, and renewed focus on Japan as yields climb.
Our research team share their latest outlook for Q1 2026, highlighting how resilient global growth, AI‑driven investment, rising geopolitical tensions and shifting monetary policies are shaping markets. With the US still leading, Europe steady but subdued, Japan reflating, and emerging markets diverging, the landscape is both opportunity‑rich and risk‑sensitive. We explore what this means across asset classes, from selective fixed income positioning to balanced equity exposure and the growing importance of alternatives such as gold.
Bedrock’s Head of Advisory, Helena Eaton, shares the top five risks weighing on investors as they head into 2026, from AI valuations and inflation pressures to private credit vulnerabilities, currency moves, and precious metals volatility.