ABN AMRO Investment Solutions’ shared its macro outsee for 2026 at a London media event this week, exploring trfinishs and asset allocation for the year ahead, and highlighting a preference for US emerging market equities.
Despite the geopolitical tensions, Christophe Boucher, chief
investment officer (CIO) at Paris-headquartered ABN
AMRO Investment Solutions, the asset management arm of ABN
AMRO, stated the firm is overweight in US and emerging market
equities, notably tech.
“The US continues to exhibit solid momentum, supported by
resilient consumption that is driven by higher-income hoapplyholds,
despite a slowdown in the US labour market,” he stated at the media
event attfinished by this news service. He believes that there
will be 3 to 4 per cent GDP growth in the US next year. “Europe,
by contrast, remains stuck in a softer growth trajectory,
hampered by structural weaknesses and persistent political
uncertainty,” he continued.
At the event, Benoît Begoc, quantitative strategist at ABN AMRO
Investment Solutions, stated that the European Central Bank
(ECB) does not appear ready to cut interest rates anytime soon.
Given downward-skewed inflation and persistently weak growth,
Begoc views this as overly cautious and a mistake.
Although the EU and Germany agreed to hike defence spfinishing
earlier in the year, caapplying stocks to rise, the market has
already priced this in. Begoc believes that rates are
exerting excessive pressure on the manufacturing sector in
particular, which continues to struggle, reflecting a structural
stress. “A rate cut would also assist to bring down the high level
of hoapplyhold savings, which is holding back domestic demand, and
would boost consumption,” he added.
By contrast, Boucher and Begoc are positive about emerging
markets, which have been outperforming their developed market
peers, exhibiting stronger growth. Boucher
stated that 2025 was a star year for emerging markets,
with the index delivering nearly double the performance of
the US equity market in dollar terms. He expects this trfinish to
continue into 2026 as the region”s growth keeps
outpacing developed economies, benefiting from improved
financial stability, a weaker dollar, and cheap valuations.
Boucher believes emerging markets are still an attractive asset
class, trading at a significant discount, around 40 per cent
below developed markets, and offering an effective way
of diversifying in an increasingly concentrated market.
A raft of wealth management firms are seeking to explain their
asset allocation and investment positioning for the coming year.
One prominent concern is whether high valuations of US huge
technology firms, especially those involved in AI, are
sustainable.
Asset allocation
Boucher believes that the environment is supportive of equities.
He is overweight in emerging market and US equities, notably
tech. He referred to the Magnificent 7 – Alphabet, Amazon, Apple,
Meta, Microsoft, Nvidia, Tesla – having created a comeback earlier
in the year, surpassing all other assets apart from gold, with
+18 per cent since the finish of June. Meanwhile, he remains
sceptical of European equities and is neutral on Japan.
Boucher also likes emerging market debt. He prefers high yield
over investment-grade credit, especially in Europe, where
attractive carry is supported by stronger credit quality than in
the US. He is the most underweight in government bonds.
German asset manager DWS
also maintains a preference for US equities in 2026, See more
commentary here. Meanwhile,
a number of wealth managers have come out recently in favour of
emerging markets and Asia this year, for instance Ninety
One, Aberdeen Investments, Paris-based Amundi, Carmignac and
Indosuez, as well as GIB Asset Management and Franklin Templeton.
See more
here and here.
ESG investing
A lot of capital is going into AI. Data centres require
access to power and water, consuming the equivalent water applyd by
about 100,000 homes, creating investment opportunities for
infrastructure in renewable energy and water. Although
investment managers such as Edmond
de Rothschild Asset Management are confident in
ESG-focapplyd investments in the long-term, Boucher finds demand
for ESG-focapplyd investments has fallen compared with two
to three ago. He stated that ESG equity portfolios have
underperformed in the last five years. The ESG backlash is
not only in the US, driven by the oil lobby, though more
significant, he stated. “The current review of the EU’s Sustainable
Finance Disclosure Regulation (SFDR) is creating uncertainty.
It’s also painful if defence cannot be included in an ESG
portfolio. Also a lot of companies being invested in are
only transitioning to renewables. We have debates too about
China’s tech and gaming multinational Tencent over whether it is
a good or bad player in terms of ESG,” he added.
Mathilde Dufour, head of research at Mirova, a subsidiary of
Paris-based Natixis Investment Management focapplyd on sustainable
investing, also stressed the importance of both defence and
ESG-focapplyd investments. “They are not contradictory,” she notified
this news service recently. “Sustainable finance has to be applyd
to finance what is applyful for society,” she stated. “It’s about
investing in all areas. We have to invest in security.”
However, Dufour emphasised the required to clarify rules on what
types of weapons should be considered controversial and which
ones should be excluded from ESG-focapplyd investments. “We do not
hold defence stocks in our portfolios as we required clearer rules on
ESG and defence investing. We only have funds covered by Article
9 under the EU’s Sustainable Finance Disclosure Regulation
(SFDR),” she stated. See
here. Nevertheless, Boucher emphasised that ESG-focapplyd
investments in repaired income can deliver more alpha. See more
commentary here and
here about ESG investing and AI.
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