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Which sectors are best to invest in for 2026?
Investment trust portfolio managers give their views on the sectors and regions they expect to outperform in 2026.
You may well be using the final few weeks of the year to gear your portfolio up for 2026.
When thinking about where to invest for the next year, there are lots of decisions to consider, including whether to back bonds, or to go for gold and other commodities.
Or, you may prefer to stick to equities. In which case – which sectors and regions have the best prospects for 2026?
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Fund managers polled by the Association of Investment Companies (AIC), an industry body representing the UK’s investment trusts, said information technology is the investment sector they expect to perform best during 2026.
Of the 21 managers surveyed, 19% picked information technology as 2026’s top-performing sector, followed by consumer staples and healthcare with 14% each.
“AI is advancing at extraordinary speed,” said Ben Rogoff, fund manager at Polar Capital Technology Trust (LON:PCT). “We expect 2026 to be the year when the capabilities of these models become unmistakable and the impact of AI increasingly impossible for investors across all sectors to ignore.”
With a five-year time horizon, though, information technology falls into second place, behind energy. This perhaps represents a view among fund managers that AI’s energy demands will limit the tech sector’s growth, to the benefit of AI energy stocks, over the long term.
“Capital spending in AI, infrastructure and energy continues to accelerate,” said Felise Agranoff, portfolio manager of JPMorgan American Investment Trust (LON:JAM). “AI investment alone is forecast to hit around $300 billion a year” in the US, she added.
Which regions do managers think will be top performers in 2026?
The AIC’s polling revealed that investment trust managers view emerging markets (EMs) as the region they expect to outperform most in 2026, with over a third (38%) picking them to be the year’s top performer.
“We think the next chapter for emerging markets looks increasingly upbeat,” said Omar Negyal, portfolio manager of JPMorgan Global Emerging Markets Income Trust (LON:JEMI). “China’s recovery is gaining traction as domestic investors return and valuations remain appealing, while India – still a powerhouse for long-term growth – is starting to look more sensibly priced after years of exuberance.”
Despite ongoing challenges in its property market, China's economic recovery is gaining traction.
(Image credit: Cheng Xin/Getty Images)
Negyal added that Greece’s comeback story is a huge positive, and that the country is reaping the rewards of deep reform.
“The real excitement, though, is in technology,” said Negyal. “Firms across Taiwan, South Korea and China are powering the world’s AI and semiconductor supply chains, setting the stage for another wave of growth.”
A softer US dollar, combined with stronger domestic demand, should also support EMs in the new year.
There is good news for UK stocks: these came second to EMs, with 19% of the vote. Two thirds (67%) of respondents felt that the UK’s flagship FTSE 100 index would rise above 10,000 next year.
“There is an exceptional opportunity at the moment in medium-sized UK higher yielding companies,” said Simon Gergel, manager of Merchants Trust (LON:MRCH). “The stock market is highly polarised and negative sentiment about the UK economy has created a great opportunity set for long-term investors.”
UK stocks could benefit from falling interest rates. Despite 95% of the managers surveyed believing that UK inflation will remain above the Bank of England’s 2% target rate during 2026, more than two thirds (71%) expect UK interest rates to fall to somewhere between 3% and 4%, with a further 14% expecting it to drop below 3%.
Thinking over a five-year time horizon, 28% of investment trust managers picked EMs to be the top performer, followed by the UK (19%), China and Europe (tied on 14%).
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
