ABN AMRO Investment Solutions’ shared its macro outlook for 2026 at a London media event this week, exploring trends 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, said 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 households, despite a slowdown in the US labour market,” he said at the media event attended 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, said 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 spending earlier in the year, causing 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 help to bring down the high level of household 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 said 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 trend 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 thinks 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 big 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 made a comeback earlier in the year, surpassing all other assets apart from gold, with +18 per cent since the end 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 used 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-focused investments in the long-term, Boucher finds demand for ESG-focused investments has fallen compared with two to three ago. He said 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 said. “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 focused on sustainable investing, also stressed the importance of both defence and ESG-focused investments. “They are not contradictory,” she told this news service recently. “Sustainable finance has to be used to finance what is useful for society,” she said. “It’s about investing in all areas. We have to invest in security.” 

However, Dufour emphasised the need to clarify rules on what types of weapons should be considered controversial and which ones should be excluded from ESG-focused investments. “We do not hold defence stocks in our portfolios as we need 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 said. See here. Nevertheless, Boucher emphasised that ESG-focused investments in fixed income can deliver more alpha. See more commentary here and here about ESG investing and AI.