While equity markets climbed in 2025, this often appeared counterintuitive given the challenges facing the global economy – including intensifying geopolitical rivalry and rising tariff barriers. The risk-led rally that followed US President Trump’s 2 April speech on tariffs was driven largely by retail flows, high-frequency traders and indexing strategies, at the expense of long-term quality investors. This proved a challenging period for Sarasin’s more defensive, thematic portfolios, which did not participate in this ‘rush to risk’.
Looking ahead to 2026, Guy Monson believes the backdrop should be more supportive. Global growth is likely to run hot ahead of the US mid-term elections, while inflation remains only modestly above target – conditions that should support equity markets and allow quality stocks to lead once again.
However, 2026 will also be a year of fragmentation – economically, politically and technologically. We expect a world of competing global powers, new tariff regimes and a renewed drive to increase defence spending. In his outlook, Guy highlights five key opportunities for investing in today’s fragmenting world – ideas that can help drive performance and build stronger, more resilient global portfolios.
Watch the video below.