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AI Boom to Fuel Risky Assets in 2026, Says Standard Chartered Report

A Standard Chartered Bank report forecasts that risky assets will outperform in 2026, driven by the artificial intelligence boom, supportive policies, and reduced trade tensions. It identifies three key themes: constructive equity markets led by US and Asia, attractive yields in emerging market bonds, and diversification through gold and alternative currencies. However, the report cautions that gains will come with greater dispersion across asset classes, necessitating careful diversification. Key risks include potential AI disappointment, credit events, and shifts in central bank policies.

Key Points: AI Boom to Drive Risky Asset Performance in 2026

  • AI-driven earnings to overcome high equity valuations
  • EM bonds favored for yield and diversification
  • Gold and alternative currencies seen as key diversifiers
  • Report warns of AI disappointment and credit risks
  • Greater market dispersion calls for broader asset allocation
2 min read

Risky assets may outperform in 2026 amid AI boom: Report

Standard Chartered report predicts risky assets will outperform in 2026, fueled by AI, easing policies, and trade calm, but advises diversification.

"We expect risky assets to outperform in 2026 amid an AI boom, easing fiscal and monetary policies and abating trade tensions. - Standard Chartered Report"

New Delhi, January 14

Risky assets are expected to outperform in 2026 as investors ride the artificial intelligence boom, supported by easing fiscal and monetary policies and abating trade tensions, highlights a report by Standard Chartered Bank.

However, the gains are likely to be accompanied by greater dispersion across asset classes, the report noted.

According to the report, "We expect risky assets to outperform in 2026 amid an AI boom, easing fiscal and monetary policies and abating trade tensions."

At the same time, it cautioned that wider-than-usual outcomes across markets call for diversification across a broader range of asset classes.

The report shared three key investment themes for 2026. The first theme focuses on equities, described as "inflating markets, inflating AI debate."

The report said AI-driven earnings growth is expected to overcome elevated valuations, keeping the outlook for equities constructive. Markets are expected to push higher through the year, led by the United States and Asia ex-Japan.

However, investors are advised to diversify as valuation concerns remain.

The second theme centres on income, with emerging market (EM) bonds expected to outperform developed market (DM) bonds.

The report said EM bonds, denominated in both US dollars and local currency, offer attractive yields and diversification away from a Fed-centric outlook. The report is overweight on EM bonds and views them as a strong source of yield within a multi-asset income strategy, alongside equity income assets.

The third theme highlights diversifiers under the heading "chasing glitter."

The report expects gold to extend gains in 2026 and said demand for alternative strategies and currencies such as the Japanese yen (JPY) and Chinese yuan (CNH) will remain important for diversification.

It added that major central banks and investors continue to look for alternatives to the US dollar, a trend that has not yet run its course.

On risks, the report flagged potential disappointment with AI, a contagious credit event, a reversal in Federal Reserve policy or a hawkish Bank of Japan as key concerns.

The report also added that while optimists argue equities remain in a bull market supported by strong AI-led earnings growth and supportive policies, pessimists warn of bubble-like valuations, sticky inflation and rising bond yields.

The report outlined that major asset classes are expected to continue inflating, led by equities, but stressed the need to plan for a wider range of scenarios in 2026.

- ANI

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Reader Comments

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Arjun K
Good to see Asia ex-Japan being highlighted! India's tech sector is poised to be a big part of this AI boom. Our own companies in AI and semiconductors could see massive growth. Time to look beyond just the US tech giants and invest in our homegrown talent. 🇮🇳
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Rohit P
The part about EM bonds is very relevant for Indian investors. With our stable macros and high yields, Indian government bonds could attract a lot of foreign money in 2026. This could be good for the rupee and for domestic liquidity. Smart move to be overweight there.
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Sarah B
As someone new to investing, all this talk of "dispersion" and "wider-than-usual outcomes" is a bit scary. The report is basically saying some will win big and some will lose big. It stresses diversification so much for a reason. Don't put all your eggs in the AI basket!
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Vikram M
Gold extending gains is classic Indian wisdom! Our parents always said keep some gold. Now even global banks agree it's a key diversifier, especially if the US dollar weakens. Maybe the old ways and new finance aren't so different after all. 😊
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Karthik V
A respectful criticism: These reports often have a Western lens. They mention Asia ex-Japan, but will the gains be evenly distributed? Or will most of the "AI boom" profits be captured by a few large US corporations, leaving emerging markets like India with just the volatility? Important question.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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