UOB Asset Management forecasts stronger growth as headwinds recede in 2026

UOB Asset Management (UOBAM) has released its 1Q 2026 Quarterly Investment Strategy, signalling a more constructive investment environment as fiscal and monetary tailwinds strengthen and corporate fundamentals remain robust.

According to the report, global markets delivered strong returns in 2025 despite tariff-related headwinds, and data trends indicate that the initial negative effects of trade conflicts have largely receded. Entering 2026, UOBAM expects economic risks to ease, supported by fiscal incentives, interest rate cuts in the US and robust AI-driven investments. Corporate earnings are also projected to rise at double-digit rates across major regions, led by Asia at 18%.

For the first quarter, UOBAM is therefore tilting slightly overweight towards equities, particularly in Asia and the US, while maintaining diversification across fixed income and commodities. Anthony Raza, head of UOBAM multi-asset strategy, said: "While the music is playing, we have to keep dancing. With strong corporate earnings and healthy balance sheets in the tech sector, we believe the market expansion cycle can continue. At the same time, diversification remains important to manage risks and capture opportunities across different scenarios. This balanced positioning provides resilience and maximises the potential for positive returns as conditions improve."

Within equities, UOBAM continues to favour Asia, citing attractive valuations, strengthening currencies, and robust domestic demand. The US is upgraded to overweight on the back of strong technology and AI-driven growth.

Within fixed income, UOBAM analysts believe diversification in fixed income categories will be useful as valuation risks grow. The firm recommends a disciplined approach focusing on high-quality developed market credits and select emerging market sovereigns.

Within commodities, gold remains a preferred safe-haven asset amid ongoing geopolitical uncertainties and structural demand from central banks.

Re-disseminated by Wealth and Society