Global Markets in 2026: Strong Returns, Narrow Leadership and Bigger Risks

Global equities enter 2026 with strong trailing performance — but also with rising concern around valuation, concentration, and sustainability of returns. SNIB describes the overall pricing environment as “fair to expensive.”

This doesn’t mean opportunity is gone. It means investors must be more selective and more diversified.

A standout trend: narrow equity leadership

Markets have been driven by a small number of shares and themes, particularly related to:

• AI capital spending

• mega-cap technology

• concentrated index exposure

The issue with narrow leadership is simple: it increases fragility.

If a small group drives index growth, any disruption to those companies impacts the entire market.

Developed vs Emerging Markets

SNIB highlights that:

• developed markets outside the US are closer to fair value

• emerging markets had a strong repair but remain selection-driven

The implication: broad, passive exposure may not deliver the same results as before. Active selection becomes more valuable.

Opportunity vs Risk: both are real

The outlook includes a useful “balanced drivers” framework — outlining both positives and headwinds.

Opportunities

• lower inflation globally

• declining interest rates

• positive growth outlook

• corporate profit expectations

• AI cycle continuation

Risks

• geopolitical instability

• de-globalisation

• inflation re-acceleration

• extended private credit cycle

• index concentration

• government debt and deficits

Global markets are not a “no-go.” But they are not a simple “buy everything” environment either.

SNIB’s message is clear:

• maintain exposure where rewarded

• reduce over-concentration risk

• diversify across styles, regions, and asset classes