A majority of Asia-Pacific institutional investors believe markets are due for a correction in 2026, citing a potential tech bubble, geopolitical tensions and recession as their primary worries, according to a survey report published on Tuesday by Natixis Investment Managers.
Global markets had been "remarkably resilient" in 2025 despite challenges such as tariffs, geopolitical conflicts and supply chain disruptions, according to Natixis. However, 74 per cent of institutional investors globally - including 80 per cent in the Asia-Pacific region - believed a correction was overdue.
Among Asia-Pacific investors, 48 per cent cited the potential for a tech bubble as their top concern, followed by geopolitical shocks at 45 per cent and recession at 40 per cent. For global investors, geopolitical shocks ranked first, with 49 per cent expressing concern.
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The sentiment suggested that "markets could run out of luck in the new year", the asset-management firm said.
About 60 per cent of investors in the region planned to boost their allocations to equities within their home region to diversify away from the US.
Nvidia CEO Jensen Huang speaks during a conference in Washington last month. A potential tech stock bubble has emerged as a primary concern for Asia-Pacific institutional investors. Photo: AFP alt=Nvidia CEO Jensen Huang speaks during a conference in Washington last month. A potential tech stock bubble has emerged as a primary concern for Asia-Pacific institutional investors. Photo: AFP>
"After a prolonged period of US market outperformance, international and non-US equities moved back into focus in 2025," said Dora Seow, CEO of Natixis Investment Managers Singapore.
The survey "indicates that even as institutional investors prepare for another spell of heightened uncertainty in 2026, they remain both optimistic and pragmatic, seeking new sources of alpha in markets such as Asia-Pacific."
Only 25 per cent of global investors planned to increase their allocations to US equities, compared with 44 per cent for Asia-Pacific equities and 42 per cent for equities in emerging markets.
Views on the Chinese market remained subdued, with three-quarters of global and Asia-Pacific investors indicating that slow growth was the "new normal". However, Asia-Pacific investors displayed greater confidence in China's resilience, with 70 per cent believing the country could withstand a prolonged trade war with the US.
Story ContinuesAbout 70 per cent of investors globally and in the region anticipated that further deglobalisation would necessitate more region-specific strategies in emerging markets.
The survey also underscored the increasing prominence of alternative investments in portfolio allocation. Over 60 per cent of investors in the Asia-Pacific region and globally planned to increase their allocations to cryptocurrencies next year, expecting these new assets to outperform traditional stocks and bonds.
Currently, 26 per cent of Asia-Pacific investors held cryptocurrencies, the survey showed.
The findings were based on responses from 515 institutional investors - including public and private pension funds, insurers, foundations, endowments, central banks and sovereign wealth funds - that collectively manage about US$30 trillion in assets worldwide.
The Asia-Pacific markets surveyed included mainland China, Hong Kong, Taiwan, Japan, Singapore and South Korea.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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