Investment Outlook February 2026

In this edition of Investment Outlook, we have increased our risk allocation. Rising global growth, contained inflation, and a broader cyclical upswing continue to provide strong support for equities, while increased investments in defense and infrastructure add further momentum to the economy. AI driven productivity is also  strengthening corporate earnings and enabling sustained margins. At the same time, geopolitical risks are rising, alongside concerns about a long term erosion of the US dollar’s value, and we also see a risk of higher long term yields as government bond supply increases. In a world where more countries are forging new partnerships and diversifying away from the United States, we see particularly strong tailwinds for emerging markets, whose sector composition includes a high share of technology companies, attractive valuations, and additional support from a weaker dollar. The outlook for Swedish small cap companies is improving as well.

Our market view

•  Global growth, expansionary policy and AI‑driven productivity support an overweight in equities
• Inflation does not constrain risk appetite, but large fiscal deficits and uncertain monetary policy argue against long durations
• Geopolitics and a weaker dollar favour equities and real assets over government bonds

Equites

• We see the greatest potential in emerging markets, driven by strong regional growth, an improving global economic outlook, and a weaker US dollar.
• Cyclical sectors are expected to deliver solid earnings growth, and small‑cap companies are projected to reverse their negative trend in 2026.
• We remain cautious about US technology companies and ongoing geopolitical risks.

Fixed income

• Low Swedish inflation means further rate cuts from the Riksbank cannot be ruled out
• Long‑term yields are under pressure from high supply
• A favourable fundamental backdrop supports credit, but valuations and supply remain headwinds
   

Investment Outlook February 2026 (PDF, ENG)