Manulife InvestChoice new and existing customers can enjoy a fund subscription fee full rebate of up to HK$5,000*

New customers - Open an account Existing customers - Register now

Latest asset allocation views for Asia Q1 2026

10 March 2026

Summary:

Three key global themes for the first quarter: Liquidity and stimulus set the stage for 2026; AI remains a structural growth driver; Accelerating growth may favour diversification
We’ve shifted to neutral on developed international markets ex-North America. Improving US data suggests a less favourable growth differential versus the prior quarter.
Asia’s manufacturing recovery and the AI boom driving strength in Taiwan and South Korea, led us to upgrade Asia-Pacific ex-Japan equities to overweight.
Within Asia, we favour high yield over investment-grade credits given attractive relative valuations, wider spreads, and strong local demand, especially as rate cuts improve refinancing conditions and credit profiles.

Positioning for what’s next: late-cycle dynamics, AI opportunities and multipolar growth.

Liquidity and stimulus set the stage for 2026

We expect 2026 to improve steadily as the year progresses. Despite near-term uncertainty, stronger liquidity, fiscal stimulus, the lagged impact of easier monetary policy, and greater familiarity with the current U.S. administration should support economic growth and global risk assets.
Central banks are largely nearing the end of their policy cycles. The US Federal Reserve (Fed) may deliver a few measured cuts, while Canada and Europe remain on extended hold. The United Kingdom faces the challenge of balancing high inflation with weak growth, which will likely keep it from easing policy. Japan is likely to continue very gradual rate hikes as it normalises policy.

AI remains a structural growth driver

US equity markets remain supported by AI-driven momentum, led by large-cap tech. Heavy investment in data centers, semiconductors, and cloud infrastructure in both China and the United States fuels optimism, even as valuations stretch historical norms.
AI enablers such as infrastructure and hardware have been clear winners, while end-user adoption in software, healthcare, and other sectors are yet to deliver meaningful success. Elevated debt among AI-focused firms remains a concern.
AI remains a structural growth theme, and capital investment should broaden economic impact. Current dynamics favour exposure to proven AI beneficiaries, with balance from quality cyclicals and non-US opportunities to hedge valuation risk.

Accelerating growth may favour diversification

Global growth should pick up in 2026 driven by rate cuts and persistent fiscal support. Additionally, moderating inflation and supportive liquidity should favour risk assets. Policy divergence and equity concentration make regional and asset class diversification crucial.
International markets are gaining traction as Europe’s recovery strengthens and global diversification themes re-emerge. Rising flows into non-US regions reflect a shift toward broader exposure in a multipolar world, supported by improving growth, attractive valuations, and Europe’s defense spending.
Emerging markets (EM) have been a bright spot, with selective opportunities ahead. South Korea and Taiwan stand out on tech and policy support, while early signs point to a more constructive tactical view on China. US dollar weakness and global growth recovery are tailwinds, but geopolitical risks and earnings uncertainty call for caution.

Broad Asset Class Outlook²

Broad Asset Class Outlook

Going into 2026, we remain modestly overweight equities versus fixed income. Corporate earnings remain resilient, and global growth is expected to hold steady, supported by fiscal spending, gradual rate cuts, and ongoing investment in productivity themes such as AI. Key risks include high valuations, inflation, and geopolitical uncertainty.
We remain underweight fixed income, favouring short duration exposures as elevated government debts and sticky inflation make long-end yields volatile. In credit, tight spreads and robust issuance leave little cushion for repricing.

Active Asset Allocation Views²

Active Asset Allocation Views

Broad Equity³

We remain overweight US equities, supported by resilient earnings, strong balance sheets, and rising AI investment for long-term growth. Recession risks appear low due to fiscal support and gradual Fed easing. We see opportunities in select sectors with structural growth trends, such as tech and communication services, despite high valuations and sticky inflation.
We’ve shifted to neutral on developed international markets ex-North America. Despite domestic cyclical resilience, improving US data suggests a less favourable growth differential versus the prior quarter. Valuations remain reasonable, while upside is capped by trade frictions.
We remain neutral on EM equities as valuations have normalised, and global trade momentum is slowing. Monetary easing and Asia’s manufacturing recovery provide near-term support, but a more constructive view would need clearer signs of an extended global cycle and a weaker US dollar.

Regional/Sector-specific Equity³

We’ve upgraded US small- and mid-caps to neutral. Earnings recovery is broadening beyond mega-cap tech. Easing Fed policy and deregulation could help. While higher financing costs and economic sensitivity remain challenges, these equities offer selective cyclical opportunities—even with limited AI exposure.
We’ve moved Europe ex-U.K. to neutral. Fiscal stimulus and accommodative policy support a solid macro backdrop, but technical momentum has weakened and earnings lag the United States. We continue to favour Spain and Italy, especially banks and value-oriented sectors.
We remain neutral on Japan equities, though they’re trending up. Stronger consumption, exports, and corporate profitability support the outlook, while some policy uncertainty, currency volatility, and rate normalization temper near-term optimism.
We’ve moved overweight Asia-Pacific ex-Japan equities, driven by Asia’s manufacturing recovery and the AI boom driving strength in Taiwan and South Korea.
We remain overweight commodities, favouring base metals like copper. We continue to favour gold as a long-term diversifier, while remaining cautious on oil due to expected supply buildup.

Active Asset Allocation Views²

Active Asset Allocation Views

Fixed Income³

We remain neutral on US investment-grade bonds, preferring mortgages over US Treasuries and credit due to limited prepayment risk.
We favour short and intermediate opportunities in the United States, as longer-term assets face structural headwinds.
We’ve moved underweight leveraged loans. Expected risk from higher default rate expectations, covenant-lite loan structures, and lower recovery rates aren’t offset by current spreads.
We remain neutral on US high yield driven by broad economic momentum. However, we expect limited upside from further spread tightening and are monitoring if recent idiosyncratic issues will remain isolated or spread to the broader high yield space.
Within Asia, we favour high yield over investment-grade credits given attractive relative valuations, wider spreads, and strong local demand, especially as rate cuts improve refinancing conditions and credit profiles.
We remain overweight EM debt. While spreads are tight, similar to other credit-related asset classes, fundamentals are strong and improving.

Copper stands out amid supply constraints³

A supply-demand imbalance supports the metal’s outlook, even amid growth risks.

Commodities can help diversify and protect against inflation. Despite slower global growth, supply constraints and long-term trends, like electrification and renewable energy, keep the outlook positive. We favour base metals—especially copper and aluminum—alongside gold, as they're essential for the energy transition and infrastructure development.

Global copper supply remains tight due to mining disruptions and few new projects. In China—the world’s largest smelting hub—record low processing fees highlight a shortage of copper concentrate and intense competition among smelters. Recent policies aimed at curbing excess capacity could further restrict supply growth.

Copper demand is supported by China’s stimulus and focus on high-tech and green manufacturing, which will lift consumption, as well as growing global electrification and renewable energy projects. Emerging technologies like data centers and AI aid support. With demand expected to outpace supply into 2026, copper remains an attractive long-term opportunity.

Copper benefits from near-term tailwinds, including a weaker US dollar and targeted infrastructure and energy transition spending that's driving demand despite slowing global growth. However, risks remain: a sharper economic deceleration could hurt industrial activity, and renewed tariff uncertainty or trade tensions may disrupt supply and demand dynamics.

Copper treatment charges at record lows⁴

Driving upward pressure on copper prices

Copper treatment charges at record lows

1 Source: Manulife Investment Management, 31 December, 2025. Projections or other forward-looking statements regarding future events, targets, management discipline or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here. No forecasts are guaranteed. These views are updated on a quarterly basis. This commentary is provided for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. Diversification does not guarantee a profit or eliminate the risk of a loss.

2 Source: Multi-Asset Solutions Team (MAST), as of 31 December 2025. Projections or other forward-looking statements regarding future events, targets, management discipline or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here. Information about asset allocation view is as of issue date and may vary. Active asset allocation views will be updated on a quarterly basis.

3 Source: Multi-Asset Solutions Team (MAST), as of 31 December 2025. Projections or other forward-looking statements regarding future events, targets, management discipline or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.

4 Source: Bloomberg, Macrobond, Manulife Investment Management, as of 26 November 2025. TC refers to treatment charge, a fee paid by miners to smelters for processing copper concentrate into refined copper. 25% indicates the copper content in the concentrate. CIF refers to Cost, Insurance, and Freight, specifying that the seller covers these costs to deliver the goods to a port.

ABOUT US

OUR FUNDS

RESOURCES

Disclosures on Climate-related Risk Management

Climate Metrics Disclosure

Pre-contractual Disclosure

Disclosures on Liquidity Risk Management

This website may contain information provided, compiled or arrived at from sources believed to be reliable but Manulife Investment Management (Hong Kong) Limited does not make any representation as to the accuracy, correctness, usefulness or completeness of the information on this website and does not accept liability for any loss arising from the use hereof or the information and/or analysis contained herein.

This website is not intended for use by any individual in any jurisdiction where, due to their nationality, residence, foreign exchange control or other circumstances, the publication or access to this website is restricted or prohibited. It shall be the sole responsibility of the investor to acquaint themselves with, and to comply with, all applicable laws and regulations of any relevant jurisdiction. Please take note that information provided here is for your reference only. No information contained here should be relied upon as investment advice or regarded as a substitute for any investment advice.

Investment involves risk. Investors should not only base on this website alone to make investment decisions and should read the offering documents for details, including the risk factors, charges and features of the products and services. This website has not been reviewed by the Securities and Futures Commission of Hong Kong. Issued by Manulife Investment Management (Hong Kong) Limited.

General Risk Disclosure

This website is not intended for use by any individual in any jurisdiction where, due to their nationality, residence, foreign exchange control or other circumstances, the publication or access to this website is restricted or prohibited. It shall be the sole responsibility of the investor to acquaint themselves with, and to comply with, all applicable laws and regulations of any relevant jurisdiction.
Funds offered on this platform may invest in equity, fixed income securities, exchange-traded funds, collective investment schemes and/or other instruments, including derivatives, and each of which has its specific investment objective/ policy with its specific features and different risk profile.
Distribution of dividends, the frequency of distribution and the amount/rate of dividends are not guaranteed. Dividend of certain share/unit classes, at the fund or the investment manager’s discretion, may be paid out of capital or gross income while charging / paying all or part of its fees and expenses out of its capital. This amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, and may result in an immediate reduction of the net asset value per share/unit of the respective share/unit classes after the distribution date.
Some funds may invest in bonds or debt securities which may be subject to credit, liquidity, counterparty and market risks.
Some funds may invest in non-investment grade bonds and unrated securities which may be subject to greater credit and liquidity risks, and may be more volatile than higher rated securities. Some funds may invest in investment grade debt securities, which may be subject to ratings downgrades by the rating agencies that may affect the net asset value of the fund.
Some funds may invest in derivative instruments which may involve additional risks. (For example, leverage may cause greater volatility.)
Some funds may make extensive use of derivatives including more complex derivative instruments or strategies to achieve the investment objective, this may give rise to additional exposure in that performance may rise or fall more than it would have done otherwise. In adverse situations, the fund’s use of derivative instruments may become ineffective and the fund may suffer significant losses. The use of derivatives may give rise to leverage, liquidity, counterparty and valuation risks.
Some funds may invest in emerging economies or markets, where special risks, including liquidity, volatility, government policies, taxation, currency, currency repatriation, political and regulatory risks, may be substantially higher than the risks normally associated with more developed economies or markets.
Some funds may invest in securities of small and/or medium sized companies in the relevant markets. This can involve greater risk than is customarily associated with investments in larger and more established companies.
Some funds may invest in a single country/region and/or a particular industry sector which may be concentrated and subject to greater risks than diversified investments in several countries and/or regions and across sectors.
Some funds may invest directly in certain China A shares via the Stock Connect, which may involve risks related to investments via the Stock Connect and Mainland China investment.
Some funds may have significant exposure to Renminbi ("RMB") bonds/equity/assets or emerging markets, which will be subject to debt instrument, credit/counterparty, concentration, liquidity, volatility, currency, tax, economic, foreign exchange/multi-currency conversion, down-grading, regulatory and political risks and these risks could be substantially higher than the risks normally associated with more established markets.
Some funds with significant exposure to RMB bonds/equity/assets may hold a significant portion of assets in deposits if there are not sufficient RMB instruments to invest in. This may adversely affect the funds’ return and performance.
Some funds using Qualified Foreign Institutional Investor (“QFII”) quota to invest directly in debt instruments/shares in Mainland China may be subject to various requirements and restrictions under the laws of Mainland China related to QFII investment and custodial risks.
Some funds are subject to the risks of investing in other funds and the risks relating to asset allocation strategy and/or downside risk management process.
As RMB is not freely convertible, currency conversion is subject to exchange controls and restrictions. There can be no assurance that RMB will not be subject to devaluation. Insufficient amount of RMB for currency conversion or devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated class(es) of certain funds. The “Dim Sum” bond market is still a relatively small market which is more susceptible to volatility and illiquidity. Due to RMB concentration risk, the value of the funds with substantial RMB exposure may be more volatile than that of a fund having a more diverse portfolio of investments.
Some funds’ performance will be closely tied to the economic, political, regulatory, geopolitical, market, currency or other conditions in the European Economic Area and may be subject to increased liquidity, price, and foreign exchange risk.
Some funds may invest in Russia and some investments in Russian securities may be unlisted securities not dealt on a regulated market. The Russian market presents specific risks in relation to the settlement and safekeeping of securities.
Investment involves risk. Investors may expose to capital loss and should not invest solely based on the information on this website alone and should read the offering documents for details including the associated risk factors, charges and features of the funds and their share/unit classes. Past performance information is not indicative of future performance.

Manulife Global Fund

Manulife Global Fund is an umbrella fund comprising a number of sub-funds investing in equity and/or fixed income securities, each of which has a different investment objective and risk profile and may involve equity market, geographical concentration, sovereign debt, liquidity, volatility, credit downgrade, interest rate, counterparty risks. Certain investors may also be subject to the risk relating to RMB hedged share class.
The relevant distributing class of the sub-funds does not guarantee distribution of dividends, the frequency of distribution and the amount/rate of dividends. Dividends may be paid out of income, realized capital gains and/or out of capital of certain sub-funds in respect of Inc share class(es). Dividends may be paid out of realized capital gains, capital and/or gross income while charging all or part of their fees and expenses to capital (i.e. payment of fees and expenses out of capital) in respect of MDIST (G), R MDIST (G) and F MDIST (G) share class(es). Dividends paid out of capital of these sub-funds amounts to a return or withdrawal of part of the amount of an investor’s original investment or from any capital gains attributable to that original investment and may result in an immediate decrease in the net asset value per share in respect of such class(es) of the sub-funds. Fixed yield share classes pay out a pre-determined annualized fixed percentage of their NAV, which can be adjusted by the Directors with at least one month’s prior notice, do not entirely reflect the actual or expected income or performance of the Fund. These distributions may exceed the actual income, leading to capital erosion, especially during negative returns or losses, and may reduce future capital growth. A positive distribution yield does not guarantee a positive return, and the absolute distributions vary with the NAV, resulting in fluctuating monthly payouts for investors.
Certain sub-funds invest in emerging economies or markets, where special risks, including liquidity, volatility, government policies, taxation, currency, currency repatriation, political and regulatory risks, may be substantially higher than the risks normally associated with more developed economies or markets.
Certain sub-funds invest in securities of small and medium sized companies in the relevant markets. This can involve greater risk than is customarily associated with investments in larger and more established companies.
Certain sub-funds concentrate their investments in a single country and/or a particular industry sector are subject to greater risks than diversified investments in several countries and/or regions and across sectors.
Certain sub-funds may invest directly in certain China A shares via Stock Connect, which may involve in risk related to Investments via Stock Connect and Mainland China investment.
Investment involves risk. The sub-funds may expose their investors to capital loss. Investors should not invest solely based on this material and should read the offering document for details including the risk factors, charges and features of the sub-funds and their share classes.
Each sub-fund intends to use financial derivative instruments (“FDIs”) for investment, efficient portfolio management and/or hedging purposes. The use of FDIs exposes the Fund to additional risks, including counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk.
Given RMB is currently not a freely convertible currency, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB. As offshore RMB (CNH) will be used for the valuation of RMB denominated Class(es), CNH rate may be at a premium or discount to the exchange rate for onshore RMB (CNY) and there may be significant bid and offer spreads and thus the value of the RMB denominated Class(es) will be subject to fluctuation. Any devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated Class(es) of certain sub-funds.

Manulife Advanced Fund SPC

Manulife Advanced Fund SPC is an umbrella fund comprising a number of sub-funds investing primarily in equity and bond securities, each of which has a different investment objective and risk level.
The sub-funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. A sub-fund may at its discretion pay dividend out of capital or gross income while charging / paying all or part of its fees and expenses out of its capital. This amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, and may result in an immediate reduction of the net asset value per share of the respective share classes after the distribution date.
Certain sub-funds with significant exposure to Renminbi (“RMB”) bonds/equity/assets or emerging markets, may involve debt instrument, credit/counterparty, concentration, liquidity, volatility, currency, tax, economic, foreign exchange/multi-currency conversion, down-grading, regulatory and political risks and these risks could be substantially higher than the risks normally associated with the world's more established markets.
A bond sub-fund may hold a significant portion of assets in deposits if there are not sufficient RMB instruments for it to invest in. This may adversely affect its return and performance.
Certain sub-funds using invest directly in debt instruments/shares via QFII regime, the Bond Connect and/or the Foreign Access Regime are subject to various requirements and restrictions under the laws of Mainland China related to investment in QFII and/or China Interbank Bond Market and custodial risks.
RMB is not freely convertible and is subject to exchange controls and restrictions.
Certain sub-funds may have significant concentrated exposures to particular industry sectors and geography's, which subjects investors to concentration and equity market risk.
Certain sub-funds may invest in equities of small- and mid-capitalization companies, which can expose investors to liquidity and volatility risks, and is subject to greater risk than is customarily associated with investments in larger capitalization companies.
Investment involves risk. The sub-funds may expose to a high risk of capital loss. Investors should not invest solely based on this material and should read the offering document for details including the risk factors, charges and features of the sub-funds.

Manulife Hong Kong Series

Manulife Hong Kong Series (“the Series”) is an open-ended unit trust comprising a number of funds primarily investing in equities, debt securities, exchange-traded funds and/or collective investment schemes, each of which has a different investment objective and risk level.
The funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. Dividends may be paid out of capital and/or out of gross income of certain funds in respect of Inc classes, while charging/paying all or part of certain funds’ fees and expenses to/out of capital of certain funds. This represents a return or a withdrawal of part of an investor's original investment amount or capital gain attributable to that amount. Distributions will result in an immediate decrease in the net asset value of the relevant units. Class AA (RMB) Inc Hedged Unit of certain funds is subject to higher distribution risks than other non-hedged unit classes.
Certain funds may involve equity market, emerging markets, Dim Sum bond market, concentration, volatility, liquidity, credit, credit ratings, below investment grade and unrated securities, credit rating downgrading, interest rates, valuation, sovereign debt, unlisted debt securities, political and regulatory, currency, foreign exchange, derivative and structured product, hedging, and distribution risks. Certain investors may also be subject to the risk relating to RMB hedged share class..
Certain funds are subject to the risks of investing in other funds and the risks relating to asset allocation strategy and/or downside risk management process.
Certain fund is subject to the risks relating to investment in exchange traded funds, Strategic and Tactical Asset Rebalancing Strategy (“STARS”), small- and mid-capped companies, convertible bonds and the risks associated with securitised debt instruments and investments in loss-absorption features. Certain fund is a feeder fund that invests all or substantially all of its assets in another collective investment scheme (the “master fund”) and is therefore subject to the risks of investing in the master fund.
Certain fund will not have direct investments other than cash, cash equivalents and financial derivative instruments (such as futures, options and forwards).
Investment involves risk. The funds may expose its investors to capital loss. Investors should not make investment decisions based on this material alone but should read the offering document for details, including the risk factors, charges and features of the Fund and its unit classes.