AllianzGI: Global Markets Remain Resilient, Investors Need to Be More Selective in Asset Choices

Allianz Global Investors (AllianzGI) assesses that the global economy is still showing resilience amid ongoing geopolitical and economic pressures. Although there are no significant indications of a global economic slowdown in the short term, investors are deemed to need to implement more selective and active investment strategies in the second half of 2026. AllianzGI’s Chief Investment Officer (CIO) team explained that global uncertainty is still influenced by a number of factors, ranging from persistently high oil prices and inflation that remains above target in most advanced economies, to the potential for increased volatility ahead of the midterm elections in the United States (US). “After being temporarily disrupted by US tariff policies, geopolitical conditions in the Middle East are now beginning to show stabilisation. However, a number of factors still need to be watched by investors, including energy prices, inflation, and political dynamics in the US that could potentially affect market sentiment,” said AllianzGI’s CIO team in its Q3 2026 House View report. In this situation, AllianzGI believes that an investment approach relying solely on market beta is no longer sufficient to generate optimal returns. The ability of investors to select countries, sectors, and investment instruments is considered to be the main factor determining portfolio performance, along with the ability to adapt to changing market conditions. “For investors, what matters is not just the direction of market movements, but also the various possible outcomes that could occur. The risk of persistently high inflation and the interest rate outlook are drawing investor attention to assets that offer value, income, and quality characteristics,” the AllianzGI CIO team added. From an asset class perspective, AllianzGI views value stocks as having attractive prospects, especially in a market still driven by Artificial Intelligence (AI) developments. Besides providing diversification benefits, this segment is also seen as potentially benefiting from a higher-for-longer interest rate environment while reflecting a shift in investor focus back to company fundamentals. “Although geopolitical conditions remain full of uncertainty, we maintain a positive view on equity markets, particularly from a systematic rather than fundamental perspective, with a preference for the US and emerging markets over Europe and Japan,” the team continued.