Ten investment & trading themes for 2026

1. The AI trade broadens — from builders to beneficiaries

2025 was about the plumbers of AI: chips, hyperscalers, and infrastructure. In 2026, the focus shifts to AI adopters — companies using AI to cut costs, lift margins, or defend market share. Investors will increasingly demand proof of ROI, not just capex headlines.

Where to look: Industrials, software, healthcare services, financials, logistics
Risk: Disappointment if productivity gains are slower or harder to measure

How to play it

UCITS ETFs

• iShares Automation & Robotics UCITS ETF (RBOT) – broad exposure beyond pure semis

• L&G Artificial Intelligence UCITS ETF (AIAI) – software, data, AI services tilt

• Xtrackers Artificial Intelligence & Big Data UCITS ETF (XAIX) – balanced global exposure

Active funds / trusts

• Polar Capital Technology Trust (PCT LN) – increasingly focused on AI monetisation

• Scottish Mortgage Investment Trust (SMT LN) – selective AI platform exposure

2. FOBO drives a second wave of AI capex

Fear of being left behind (FOBO) accelerates AI investment across corporates and governments. Even sceptical CFOs struggle to under-invest when competitors are scaling. This creates a capex “arms race”, particularly in data centres, power, cooling, and networking.

Where to look: Semiconductors, electrical equipment, power infrastructure, data-centre REITs
Risk: Overbuild and falling returns later in the cycle

How to play it:

UCITS ETFs

• iShares Semiconductor UCITS ETF (SEMI / IUES)

• VanEck Semiconductor UCITS ETF (SMH)

• iShares Global Infrastructure UCITS ETF (INFR) – data centres, power grids

3. Monetary policy turns from restraint to accommodation

By 2026, the Fed is no longer the market’s main obstacle. With inflation cooling and growth uneven, policy is supportive rather than restrictive. Rate cuts may be gradual, but the direction of travel matters — easing financial conditions underpin risk assets.

Where to look: Growth equities, EM assets, long-duration trades
Risk: Inflation persistence forcing policy back into “higher for longer”

How to play it

UCITS ETFs

• iShares NASDAQ 100 UCITS ETF (CNDX)

• iShares Core MSCI World UCITS ETF (IWDA)

Funds

• Fundsmith Equity – quality growth with rate sensitivity

• Baillie Gifford Global Discovery 

4. Fiscal policy fills the growth gap

Governments step in where private demand weakens. The US election cycle, German investment push, and Japan’s reflation agenda combine into a global fiscal impulse — supporting infrastructure, defence, energy transition, and domestic manufacturing.

Where to look: Industrials, construction, defence, domestic cyclicals
Risk: Rising debt costs reignite sovereign stress

How to play it:

UCITS ETFs

• iShares Edge MSCI USA Quality Factor UCITS ETF (IUQA)

• iShares STOXX EU 600 Technology UCITS ETF (EXV3)

• iShares Core MSCI Japan IMI UCITS ETF (IJPA)

Trusts

• JPMorgan Japanese Investment Trust (JFJ LN) 

5. Valuations become the market’s pressure point

High starting valuations — particularly in US mega-cap tech — leave little margin for error. Earnings must keep delivering. 2026 is less about multiple expansion and more about earnings discipline.

Where to look: Stocks with pricing power and balance-sheet strength
Risk: Sharp deratings on earnings misses or guidance cuts

How to play it 

UCITS ETFs

• iShares MSCI World Quality UCITS ETF (IWQU)

Funds

• Lindsell Train Global Equity

• Terry Smith Fundsmith Equity 

6. Rotation into value, cyclicals, and real assets

As policy eases and fiscal spending rises, capital rotates from “long-duration certainty” into cyclicals, value, and real assets. This is less about abandoning tech and more about broadening leadership.

Where to look: Financials, materials, energy, industrials
Risk: False dawn if growth rolls over

UCITS ETFs

• iShares MSCI World Value Factor UCITS ETF (IWVL)

• SPDR MSCI World Value UCITS ETF (WVAL)

• iShares MSCI Europe Value UCITS ETF (IEVL)

Trusts

• Temple Bar Investment Trust (TMPL LN)

7. Energy security beats energy transition narratives

The energy transition continues, but geopolitics and grid reality push energy security back to the forefront. Fossil fuels, nuclear, and grid investment coexist with renewables rather than being replaced by them.

Where to look: Oil & gas, uranium, utilities, grid infrastructure
Risk: Policy shocks or abrupt subsidy changes

How to play it

UCITS ETFs

• iShares Global Energy UCITS ETF (INRG / IEGY)

• SPDR MSCI World Energy UCITS ETF (WNRG)

• VanEck Uranium and Nuclear Technologies UCITS ETF (NUCL)

Trusts

• Gore Street Energy Storage Fund (GSF LN) 

8. Japan and Europe offer asymmetric upside

While US markets remain dominant, Japan’s reform story and Europe’s fiscal pivot offer selective opportunities at more reasonable valuations. Capital flows become less US-centric.

Where to look: Japanese financials, exporters; European industrials and banks
Risk: Currency volatility and political noise

How to play it

UCITS ETFs

• Xtrackers Nikkei 225 UCITS ETF (XDJP)

• iShares MSCI Europe Quality Dividend Adv UCITS ETF (EQDS) 

9. Volatility returns as a feature, not a bug

Markets in 2026 are more two-way. Policy uncertainty, geopolitics, and crowded positioning create frequent pullbacks — but also opportunities for tactical traders.

Where to look: Options strategies, relative-value trades, volatility selling after spikes
Risk: Regime shifts catching positioning wrong-footed

How to play it

UCITS ETFs

• iShares Edge MSCI World Momentum UCITS ETF (IWMO)

• iShares Edge MSCI World Minimum Volatility UCITS ETF (MVOL) 

10. Tail risks matter again

Geopolitics, trade fragmentation, AI regulation, cyber risk, and debt sustainability sit quietly in the background — until they don’t. 2026 is a year where risk management becomes alpha, not just defence.

Where to look: Gold, defence stocks, diversification strategies
Risk: Complacency after years of strong returns

How to play it

UCITS ETFs

• VanEck Gold Miners UCITS ETF (GDX)

• VanEck Defense UCITS ETF (DFNS) 

Summary

2026 looks less like a one-trade market and more like a stock-picker’s environment. AI remains the structural story, but leadership broadens. Policy turns supportive, fiscal steps in, and valuations force discipline. The opportunity is real — but so is the risk of assuming the past few years simply roll forward.