Manulife Investment Management Sees Clearer Global Outlook and Robust Asian Opportunities in 2026

JAKARTA - Manulife Investment Management today released its Asia market and investment outlook for the first half of 2026, highlighting the now clearer global economic conditions, increasingly open government policies, and Asia's continued strong position as a source of growth and diversification for investors.

With inflation starting to fall and monetary policy becoming looser, Manulife Investment Management believes that current conditions are more supportive for taking selective risks in the stock, bond, and multi-asset portfolios in Asia.

Global economic growth in early 2026 is expected to remain stable. This is supported by a gradual decline in interest rates, strong corporate performance, and continued investment in themes that increase productivity such as artificial intelligence and digitization. Although there are still geopolitical risks and fiscal challenges in developed countries, Asia remains attractive to investors due to its strong domestic demand, more flexible policies, and structural reforms that continue to be the basis of its long-term investment appeal.

Macro outlook: Policy clarity supports selective risk-taking

Yuting Shao, Senior Global Macro Strategist, believes that global macro conditions are becoming more balanced as markets move beyond the extreme volatility that has occurred in recent years.

"Towards 2026, the global macroeconomic conditions look clearer than before. Inflation has started to fall in many major countries, so central banks can focus again on promoting economic growth rather than just holding back price increases. Although policy uncertainty and geopolitical risks still exist, the direction of monetary policy is now easier to predict. This creates a more positive environment for investors, both globally and in Asia," said Shao, Wednesday, January 22.

Shao added that Asia is in a strong position to take advantage of monetary policy easing, a weakening US dollar, as well as various different domestic growth factors. The economic cycle in Asia is also different from developed countries, and it is this difference that continues to open up new investment opportunities for investors.

Multi-asset Asia: A disciplined strategy in an improving environment

Luke Browne, Global Head of Multi-Asset Solutions, Senior Portfolio Manager, Head of Multi-Asset Solutions, Asia, said that Manulife Investment Management remained optimistic but was moderately cautious about risky assets, while still emphasizing diversification and discipline.

"Entering 2026, we remain slightly more selective of stocks than bonds, a choice based on resilient performance, supportive fiscal spending, and gradual easing of monetary policy. But with high valuations, inflation, geopolitics, trade debates on AI, energy transition, and changes in the composition of the Federal Reserve, asset allocation decisions need to remain selective and dynamic," said Browne.

In the fixed income category, Browne explained the preference for shorter-dated bonds and selective credit opportunities in Asia and emerging markets, given the continued volatility in the long-term yield curve.

"Asian assets continue to play an important role in multi-asset portfolios by offering diversification benefits and exposure to growth drivers that are not overly dependent on the market cycles of developed countries," added Browne.

Asian Shares: Earnings Support and Structural Growth Factors

June Chua, Head of Asia Equities, said that the outlook for Asian equities remains positive ahead of the first half of 2026, supported by favorable currency dynamics and improved earnings visibility.

"Asian stock performance outside Japan was very strong throughout 2025, driven by a weakening US dollar and easing monetary policy. Going forward, the projected profit growth for 2026 and 2027 continues to support stock valuations, while global investor allocations to Asian stocks are still relatively small, indicating room for their greater involvement again," he explained.

Highlighting structural opportunities across Asia, Chua explained that in China, policy clarity in the 15th Five-Year Plan continues to support innovation-driven growth in areas such as artificial intelligence, new energy, advanced manufacturing, and health. Taiwan also remains an important hub in the global AI ecosystem, supported by high demand for advanced semiconductor packaging technology and data center infrastructure.

In other Asian regions, ASEAN countries continue to benefit from supply chain diversification, infrastructure investment, and increasing domestic demand - although the opportunities are different in each market. In India, the latest fiscal and monetary policies have helped drive domestic consumption-based growth and mitigate short-term external pressures. Meanwhile, Korea has shown improvements in capital management discipline and reforms that are more shareholder-friendly, which could support market value increases.

"The level of performance differences between markets and sectors remains high, and active stock selection remains important, especially as we focus on companies with strong balance sheets, sustainable earnings growth, and exposure to long-term structural themes," Chua said.

Asian fixed income: Income and diversification in a changing world

Murray Collis, Head of Asia Fixed Income, said that the Asian bond market entered 2026 with positive momentum, supported by lower interest rates and improving market coverage.

"Although the global conditions of the past few years have been quite challenging, the Asian bond market has still shown a resilient performance, and we expect this positive momentum to continue until 2026. The decline in interest rates in the US, the development of the high-risk bond market in Asia, and the increasing diversification from the US dollar open up attractive investment opportunities for investors," said Murray.

He added that the opportunities for fixed income investment in Asia are now wider and balanced.

"High-yield bonds in this region are now more diverse and have better quality than before. Meanwhile, the bond market in local currencies is also increasingly sought after by investors, especially due to the de-dollarization trend and currency diversification efforts. This dynamic further strengthens Asia's role as a source of income and diversification in investment portfolios," he explained.

"Policy directions, credit fundamentals, and market technical conditions vary significantly across regions. China, Japan, and India stand out as key markets where policy support, market depth, and structural reforms strengthen their investment prospects, but selectivity and risk management will be key in facing 2026," added Collis.

Placement for the first half of 2026

Ahead of the first half of 2026, Manulife Investment Management expects Asia to remain a key destination for investors seeking growth, income and diversification amid changing global conditions. While volatility and uncertainty may still occur, increasing clarity of macroeconomic conditions and more supportive policy trends create a more stable environment for long-term investors.

"The story of Asian investment in 2026 does not depend on one market or one theme alone. According to him, Asia's strength lies in resilience, diversification, and the ability to adapt in the midst of a changing world," said Shao.