Those views come from Samy Chaar, chief economist, CIO Switzerland at the Geneva-headquartered private banking group, in a recent outlook. He set out views in a note alongside those of a number of colleagues.

There are grounds – in some areas – to be positive, Chaar said. “Yet fiscal policy remains expansionary in many major economies, while monetary policy will provide support. The outlook in emerging economies has improved,” Chaar said.

Chaar expects below-trend and below-potential US growth in 2026. Business investment should remain strong, particularly in artificial intelligence, as should government spending. Chaar sees a further weakening of the labour market, and below-potential growth as the impact of tariffs is felt increasingly by businesses and consumers. Policy uncertainty will persist, while average inflation is expected to remain above target in 2026, with interest rates gradually falling to 3 per cent.

“In contrast to a volatile US policy environment, the outlook in Europe is stabilising,” Chaar said. He expects the eurozone economy to expand around its potential rate of 1 per cent in 2026, with interest rates on hold and inflation remaining roughly in line with target over the year. He expects unspectacular growth of just over 1 per cent across the euro area, helped by German defence spending and the lagged impact of interest rate cuts. Southern European countries should continue to outperform, helped by disbursements from EU funds. Chaar expects controlled inflation and interest rates to be held at 2 per cent this year.

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 big technology firms, especially those involved in AI, are sustainable. 

Asia
In China, growth has also stabilised, thanks to periodic injections of policy support which he believes will continue in 2026. He sees a gradual slowing in Chinese growth to just above 4 per cent in 2026.

In Japan, Homin Lee, senior macro strategist at Lombard Odier, expects another year of positive growth, above-target inflation, and solid wage gains. The Bank of Japan should carry out two rate hikes to take its benchmark rate to 1 per cent by end-2026.

With regard to emerging markets ex China, Lee believes that emerging markets’ outlook is solid thanks to easier funding, a global capital spending boom, and a stabilising trade environment. “Politics will be the key topic for Latin America as Brazil, Peru, and Colombia hold general elections in 2026 after major electoral shifts in Chile and Argentina in 2025,” he said.

Meanwhile, Nannette Hechler-Fayd’herbe, head of investment strategy, sustainability and research, CIO EMEA, believes that increased oil output and interest rate cuts will continue to strengthen growth in the Gulf countries. She sees stable yet unspectacular economic conditions in Europe and the UK, and quiet macroeconomic improvement in South Africa and Turkey.

Asset allocation
Equity valuations have risen globally with the 2025 rally, but have remained lower in emerging markets, which also offer stronger earnings growth potential, according to Luca Bindelli, head of investment strategy. “Emerging market bonds look attractive, while fiscal and debt risks could limit developed market sovereign bond returns. Record tight corporate credit spreads will also limit returns and require a more tactical approach,” Bindelli said. He expects the US dollar to weaken as US interest rates fall. Alternative assets, especially gold, can offer portfolio diversification amid policy uncertainty; energy transition and AI-linked commodities should also stay supported.

Meanwhile, Corinne de Boursetty, senior equity strategist, is positive on equities given her expectation of solid earnings growth, although returns may be lower than in the past two years. “The US remains a core holding, but upside looks capped by high valuations and earnings expectations,” she said. She expects a rotation into better valued regions and sectors, including Europe and Switzerland, where there is scope for an earnings recovery.

Patrick Kellenberger, emerging market equity strategist, believes that emerging market stocks should rise further in 2026, supported by macroeconomic, earnings, and technical drivers. He sees earnings growth accelerating to 15 per cent, although valuation tailwinds may fade. He prefers India and South Korea and also sees upside in China and Brazil.

Sami Pepin, fixed income strategist, also favours emerging market bonds. He sees income opportunities offered by emerging market debt and expects limited performance from corporate bonds. Within developed market sovereign bonds, he likes UK gilts, as falling inflation should allow the Bank of England to cut rates more than the market currently expects. He also sees selected opportunities in emerging market local currency debt in Latin America and Asia.

Meanwhile, Kiran Kowshik, global FX strategist, expects a modest decline in the dollar against a range of other major currencies. “Sterling and the Japanese yen could remain volatile due to country-specific factors,” he said. He sees a positive outlook for gold over the coming 12 months.

Thierry Celestin, head of private asset client services, private bank, remains a high conviction investor in mid-market private equity globally, complemented by direct co-investments and niche secondary strategies. He favours well-diversified private asset portfolios with a selective exposure to private credit and real assets. “Private assets play a central role in our ‘total wealth’ approach for eligible investors with the appropriate time horizon and risk tolerance,” he said.

Sustainability
Sophie Chardon, head of sustainable investments, private bank, highlighted that 2025 was a tough year for sustainability but a good one for sustainable investment, which shows clear signs of maturity.

“The sustainability agenda is entering a new phase – one defined less by policy ambition and more by performance and tangible outcomes. We are witnessing a strategic reset: sustainability is no longer perceived as a cost or a regulatory burden, but as a catalyst for economic growth, energy and food security, and cost-of-living relief,” Chardon said. Despite US President Trumps attitude to climate change, she notes that the number of US firms disclosing science-based targets for their emissions reductions has continued to increase in 2025.

“What we are seeing is not a retreat from ambition, but a recalibration towards actions that deliver results and align with regional needs, whether in energy and food security or social welfare,” Chardon said. “This is enabling policymakers, investors, and companies to focus on proven strategies, build resilience, and unlock new sources of value.”

“As the private sector increasingly takes the lead, the transition to a net-zero, nature-positive, inclusive, and digitally enabled economy is becoming more regional, more pragmatic – and more opportunity-driven,” she continued. “The rise of AI infrastructure is driving accelerated electrification, a core investment theme in the sustainability transition.”