After emerging market equities outperformed many developed markets in 2025, led by a broad rally in emerging market stocks and local-currency bonds, a number of wealth managers believe that this trend will continue in 2026. They also highlighted a preference for gold and defense amidst geopolitical uncertainty and the US intervention in Venezuela.

In his latest global outlook 2026, Ronald Temple, chief market strategist at Lazard believes that emerging markets are appealing, and can offer artificial intelligence exposure at far lower valuations. “The MSCI Emerging Market Technology sector trades at ~40 per cent below its US counterpart – alongside multiple uncorrelated growth drivers,” Temple said.

His views were shared this week by Nakul Zaveri and Souleymane Ba, co-heads of LeapFrog Investments Climate Investment Strategy, who believes that investors in 2026 have growing reasons to be constructive on emerging markets over the coming years. “Continued dollar weakness could provide a sustained tailwind for emerging market assets, supporting further outperformance. As US and European rates trend lower, the real rate differential moves in emerging markets' favor,” Zaveri said.

“Certain emerging market central banks led the hiking cycle early and might have tamed inflation, which could lead to monetary stability heading into 2026, not to mention cleaner balance sheets for emerging market countries and corporates,” Zaveri continued. “Emerging market public market valuations still look relatively inexpensive, creating the opportunity to invest in high-growth companies at attractive risk-return profiles.”

“Artificial intelligence and digital technology adoption is accelerating in emerging markets, with massive capex deployment plans into data centers, cloud computing, chips, renewable energy, transmission, and electrification, driving the green discount deeper and broader,” Zaveri added. “Certain global supply chains are being rewired in light of Chinese geopolitics, potentially benefiting other countries across Asia and Africa. Structural themes such as strong demographics and domestic demand create solid visibility of continued revenue and earnings growth for years to come.”

This week, Daniel Casali, chief investment strategist at UK wealth manager Evelyn Partners, also highlighted how emerging markets outperformed developed markets in 2025 and could do so again in 2026, supported by a weaker US dollar. “Importantly, China’s push for AI self-reliance and large-scale infrastructure projects is lifting investor sentiment and narrowing the emerging markets equity valuation gap with developed markets,” he said. “China’s renewable surplus may also become a strategic asset in the AI race,” Naomi Fink, chief global strategist at amova asset management, added.

Commodities
Casali said that gold’s rally to record highs is driven by structural demand led by central banks in emerging economies. “Globally, net bullion purchases have accelerated since Western sanctions on Russia in 2022. At the current pace, central banks are on track to buy around 1,000 tonnes for what would be the fourth consecutive year in 2025, compared with an annual average of 48 tonnes sold between 1970 and 2021,” Casali said. “This trend reflects a clear preference for security over returns, driven by declining confidence in the US dollar system and concerns about secondary sanctions. In addition, with Western public debt continuing to rise and gold’s proven role as an inflation hedge, as [was] evident in 2022, when equities and bonds fell while gold held steady, holding bullion provides resilience amid geopolitical and financial uncertainty.”

The Saxo strategy team said oil steadied this week after reversing early losses on Monday as traders balanced Venezuela-related geopolitical risk against persistent concerns about a global supply glut. US energy equities led the gains, with oil majors, refiners and oilfield service companies rising on expectations that American firms could eventually be involved in rebuilding Venezuela’s oil industry. “That said, the market remains mindful that any meaningful recovery in Venezuelan production would be a slow, multi-year process,” Saxo said. “Silver has also gained around 11 per cent while gold trades up 3 per cent with both trading near their December record highs.”

Meanwhile, Temple expects a brighter outlook for the eurozone economy in 2026. “Low interest rates and energy prices, rising real wages, and continued fiscal expansion support growth in 2026. Risks include uncertainty around defense spending, political fragility, and countries’ willingness to implement economic reforms,” he said.

Defense
Saxo highlighted how defense and technology led as weekend events in Venezuela lifted geopolitical risk, and investors kept betting that European defense budgets would stay structurally higher. “Rheinmetall jumped 9.4 per cent as the sector caught a bid, while ASML climbed 6.8 per cent after Bernstein upgraded the stock and lifted its price target,” Saxo said.

“The intervention in Venezuela has further affirmed the need for heightened defense spending and resilience in a fragmented world,” Weiheng Chen, global investment strategist at JP Morgan Private Bank, continued. “US defense outlays are set to surpass $1 trillion in 2026, while Europe is leading the response with new NATO guidelines pushing core defense spending to 3.5 per cent of GDP plus an additional 1.5 per cent for infrastructure. These moves reflect a global shift toward prioritizing security, supply chain integrity, and energy independence, with governments and investors alike recognizing defense as a strategic imperative.” Chen thinks that defense presents a compelling long-term investment theme, offering resilience, diversification, and upside amid rising geopolitical risk and global fragmentation.