The editor takes a brief look at the sort of considerations in play for wealth managers seeking to manage clients' money as the year gets under way.

With the start of a new year, it is typically time for wealth managers to figure out how to allocate money to achieve what clients want and, as a bare minimum, avoid losing money.

What appeared clear as predictions rolled in before the holiday break is that there is a bit of a split between those who think the US economic juggernaut will roll on, with more equity gains, and those who think the market is due for a setback if earnings in areas such as AI-related stocks fail to justify the billions of dollars being invested.

Wealth managers and banks are also trying establish whether the revived fortunes of emerging markets last year will endure – benefiting from a weaker US dollar (the US Dollar Index fell almost 9 per cent in 2025). Another question is whether the 2025 rise in European equities, helped by a greater focus on defence and infrastructure spending, and perceived more attractive valuations, can continue.

Emerging markets are a focus at the start of this year in part because of geopolitics. 2026 has started with a bang. The US capture and legal proceedings against former Venezuela president Maduro involve an oil-rich state that is home to the largest oil reserves in the world but wrecked by more than a decade of socialist economics, corruption and violence. Whatever else can be said of the Trump administration’s actions, they’ve put energy high up the agenda – and that is important for emerging market countries that produce it. Saudi Arabia – an emerging market jurisdiction – and its Middle East neighbours will watch closely to see the impact on crude oil prices in the medium term. This will also affect producers such as Indonesia and importers of oil such as India and Japan.

Mention of Saudi Arabia is a reminder that on 1 February the Kingdom will enable foreign investors more latitude to play in its domestic stock market. This is not necessarily a big booster for this country’s market just yet, but another example of changing dynamics in the region’s capital markets. The development also shows that talk of a big reversal to “globalisation” is a bit overdone. The wider access of Saudi stock markets to outsiders is a case in point.

The editorial team will continue to track the views of wealth managers not just about listed stocks and bonds, but also how the asset allocation equation also applies to private markets (debt, equity, venture capital, infrastructure, property). The general tone of reports and comments in recent years is that family offices, wealth managers and private banks have added exposures, with more room to run.

However, there is a bit of a sceptical tone that we have noticed recently – wealth managers are getting impatient about reaching exits on their private market investments before putting fresh capital to work. And, as more money floods in, what will be the impact on yields? After all, 25 years ago, hedge funds were all the rage, and attracted big inflows, and eventually their fees were compressed and some performance left clients disappointed.

Besides the “allocation” side, it is likely that the asset “location” side will remain important. Governments’ tax policies also affect the asset location equation. Remember, it is post-tax investment returns that clients receive in the end.