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China and Japan are tied for the top spot as the most promising markets to invest in this year, according to a recent survey conducted by the Investment Management Association of Singapore. The survey included executives from 63 member firms that collectively manage around $35 trillion.
About 21% of respondents identified China and Japan as the best markets to target in 2026. India was close behind at 13%, with Singapore and Taiwan each garnering 11%. Regarding growth expectations, 73% of those surveyed anticipate the MSCI China Index to increase between 10% and 20%, while 72% expect the MSCI Asia ex-Japan Index to see similar gains.
Despite these optimistic outlooks, 61% of participants don’t foresee China’s gross domestic product accelerating, suggesting that investment enthusiasm is driven more by attractive valuations, policy incentives, and sector-specific opportunities rather than overall macroeconomic momentum.
Geopolitical risks are becoming an increasing concern, with 85% of respondents expecting heightened volatility to influence market sentiment and risk management throughout the year.
Fund managers are demonstrating resilience amid ongoing uncertainties, successfully identifying promising opportunities across Asia even as geopolitical tensions intensify. Industry leaders note that for managers based in Singapore, the environment requires moving from experimentation to disciplined execution, emphasizing scalable business models and leveraging artificial intelligence to boost productivity.
Artificial intelligence continues to be a key focus, with 75% of those surveyed disagreeing with the idea that the AI bubble will burst this year, reflecting strong confidence in AI’s potential to enhance productivity and reduce costs across various sectors.
More than half of the surveyed managers are already using AI tools in core investment activities such as research, analysis, and fund commentary. Many also incorporate AI to improve efficiency in areas like distribution, compliance, and human resources. Their primary interests in financial technology include advanced analytics, machine learning, and generative AI.
Additionally, 60% of executives expressed concern that the independence of major central banks might weaken in 2026, highlighting worries over political interference in monetary policy.
While opinions on global inflation remain mixed, 97% expect the Federal Reserve to continue easing monetary policy, with 69% predicting rate cuts exceeding 0.5% by year’s end.
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