Risky Assets Set to Ride the AI Wave in 2026, Says Standard Chartered

Standard Chartered Bank forecasts risky assets will thrive in 2026, driven by the AI revolution and favorable fiscal policies. Investors should brace for diverse outcomes, with equities and emerging market bonds highlighted as potential winners. Diversification remains crucial amid market uncertainties.

Standard Chartered Bank's latest report predicts that risky assets will excel in 2026, bolstered by the advancements in artificial intelligence and softened fiscal and monetary policies. The report suggests that easing trade tensions will also aid this upward trajectory, although it cautions investors to prepare for diverse market outcomes.

With a strong focus on AI-driven earnings growth, the report describes equities as a promising area, expecting notable contributions from the United States and Asia excluding Japan. However, it warns investors about potential overvaluation and advises maintaining a diverse portfolio.

Emerging market bonds, particularly those in US dollars and local currencies, are expected to outperform in the bond sector, offering significant yields and a shift away from a predominant Federal Reserve perspective. Gold and alternative currencies like the Japanese yen and Chinese yuan are highlighted as essential diversifiers, even as concerns about AI optimism, credit events, and central bank policies loom.

(With inputs from agencies.)