Simon Doherty

As we move into 2026, the investment landscape remains promising but nuanced. While equity markets appear poised for further gains, supported by solid fundamentals and earnings growth, investors must navigate uncertainties around US policy shifts, central bank actions, and geopolitical developments. The strong run higher in equity markets over recent years has certainly left investors feeling nervous, while another concern often cited relates to current stock market valuations, with global equities trading above their long-term average. In both cases, we would highlight that the picture is more intricate – and positive – than it first appears. We continue to see a constructive environment for equity and bond investors, but one in which we nevertheless remain prudent, avoiding all-in bets on specific themes or markets. While we believe that AI is a potentially transformative technology, offering considerable growth potential ahead, our exposure to US technology names remains selective, with a focus on growth at a reasonable price, not at any price. Away from this sector (that continues to dominate headlines) we see exciting opportunities across Europe, whether from the effects of increased infrastructure and defence spending, or the chance to purchase quality businesses currently out of favour. Emerging markets also continue to offer attractive valuations, strong earnings, and robust GDP growth, while elsewhere we see merit in retaining the diversifying benefits afforded by alternative investments such as UK REITs, listed infrastructure, listed private equity, and hedge funds.

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