Looking beyond big tech for opportunities as active managers is the focus of members of the Group of Boutique Asset Managers (GBAM) as they look back at what happened in 2025 and look ahead at the opportunities beckoning into 2026.
Tim Warrington, chairman of GBAM and Skagen Funds, notes that “Despite an early scare, markets have scaled the wall of worry and shrugged off tariff and geopolitical concerns to deliver another strong year for equity investors.”
“Beneath the surface, returns have been broader based than previous years with all global sectors higher and several country indices hitting all-time highs in 2025, notably in Europe and the Emerging Markets.
“Although the ‘End of American Exceptionalism’ proclaimed by some at the start of the year was mis-placed – US strength will endure, and AI remains the market’s growth engine – investors who look beyond the obvious concentrated winners will likely be rewarded in 2026. Central banks easing monetary policy globally and US dollar weakness should help regional markets and cyclicals gain further momentum and offer opportunities in neglected sectors and companies as an alternative to mega-cap tech stocks.
“Closer to home, recent regulatory and tax changes in Norway will level the playing field and stem the exodus of funds to overseas domiciles. A harmonisation of jurisdictional variations should also mean client interests are served without distraction and outcomes improved.
“With markets and valuations higher than the start of the year, risks are also elevated but our guidance in SKAGEN remains unchanged – diversify sensibly, monitor exposure regularly and always seek advice before making any big decisions.”
Andrew Ward, CEO at Aubrey Capital Management based in Edinburgh has highlighted where they see opportunity in identifying market leaders through active management.
“Looking ahead to 2026, Aubrey’s investment team believes market leadership could begin to broaden as inflation continues to ease and interest rate cuts become more visible. Periods of narrow, index-driven performance tend not to persist indefinitely, and historically, a more supportive monetary backdrop has coincided with a wider range of companies contributing to returns. In that environment, fundamentals such as earnings growth, cash generation and balance sheet strength typically play a greater role in shaping outcomes.”
“Artificial intelligence is likely to remain an important theme, with demand for infrastructure and related investment still strong. However, the team notes that advanced semiconductor manufacturing is highly concentrated, and capacity constraints are a real consideration over time. Semiconductors also remain cyclical, meaning the pace of investment is unlikely to be constant. As a result, selectivity and valuation discipline will become increasingly important as the cycle matures.
“In emerging markets, the outlook for 2026 appears more constructive than it has in recent years. Inflation has been falling across many countries, interest rates have already begun to come down in parts of the emerging world, and a softer US dollar and lower oil prices are providing a more supportive macro backdrop. India, in particular, is seen as having consolidated after a strong run, with robust growth, favourable demographics and improving valuations creating potential for renewed momentum.
“While the UK continues to face structural growth challenges, the team sees selective opportunity emerging in areas that have been heavily sold. Persistent outflows from UK equities have created valuation gaps, particularly among investment trusts trading at wide discounts to net asset value. For investors with flexibility, these areas may offer access to high-quality global or specialist assets at prices that appear disconnected from underlying fundamentals.
“As our business continues to strengthen, we look forward to collaborating more with our partners in Chile and working ever closer to generate new business in that region. Both in the UK and Europe, we continue to push the boundaries of our operations and explore new business development opportunities.”
Another GBAM member, MAPFRE Asset Management – and which recently announced a restructuring of its business to boost net subscriptions to its funds – commented that “No investor would deny that 2025 has been a “lively” year.”
“Tariffs, interest-rate cuts, and questions about a potential artificial-intelligence “bubble” have dominated headlines in recent months. Even so, 2025 will also be remembered as a year of transition and adjustment.
“After several years marked by high inflation, aggressive rate hikes, and significant geopolitical volatility, 2025 brought early signs of stabilization: inflation began to ease across most advanced economies, central banks embarked on a gradual path of rate cuts, and markets started to respond with greater rationality—although they remain highly sensitive to new developments.
“One of the most contentious issues this year has been tariff policy. The United States raised duties on strategic Chinese products, particularly those linked to the technology and energy sectors. This heightened global uncertainty and prompted targeted retaliatory measures from Beijing. This trade tension rippled through equity markets, especially in Asia and in companies with substantial international exposure.
“2025 has also been the year of artificial intelligence. AI has begun to integrate across industrial, healthcare, and financial sectors, creating new investment opportunities. Companies able to deploy AI to improve efficiency and operating margins have attracted significant investor interest. At the same time, concerns emerged around potential overvaluation in parts of the sector – fueling fears of a possible “bubble.”
“In 2025, equities delivered historically strong returns, particularly in Europe. For example, Spain’s IBEX 35 rose by almost 44% year-to-date, well above the performance of markets such as the United States. This outperformance was driven by the heavy weight of the banking sector in the index (Santander, BBVA, CaixaBank, and others) and by the sharp increase in defence spending, both of which lifted valuations in those sectors.
“At the global level, trade tensions and geopolitical conflicts (the war in Ukraine, tariff truces and rhetoric) created uncertainty but also attracted flows to more “affordable” markets such as Europe.
“One of the clearest lessons from 2025 – one that may be especially relevant in 2026 – is that investing exclusively in the large US tech companies may leave opportunities on the table. Geographic and sector diversification could be essential in the year ahead.
“In this context, investing in line with the pace of the economy, selecting companies with strong management, and taking advantage of the upward trend in equity markets in recent years.
“In 2025, fixed income mirrored the global moderation in inflation. With inflation close to 2% in Europe and around 3% in the United States toward year-end, central banks began to cut interest rates after several years of significant tightening. This spurred some demand for bonds.
“In Europe, the gap between short- and long-term bond yields is minimal. In this context, taking on significant duration risk (buying very long-dated bonds) provides only limited additional compensation: the term premium is small, and investors may be vulnerable if the curve shifts unexpectedly.
“In fixed income, it may be advisable to favour short- and medium-term bonds (reduced duration). High-quality corporate bonds or credit funds may offer better risk-adjusted returns than long-term sovereign debt.
Ultimately, avoid excessive duration exposure and diversify across issuers (government, corporate, and inflation-linked bonds) to help mitigate surprises.
“What did 2025 teach us?
- Macroeconomics matters. Inflation, interest rates, and growth remain the key drivers of markets.
- Geographic and sector diversification can make a difference. European assets outperformed while the United States delivered more moderate results.
- Timing within the cycle is crucial. A flexible investment approach – adjusting the portfolio to each phase – improves outcomes.
- Technology and AI are structural forces reshaping markets, but they require selective analysis to avoid bubbles.”
