Macroeconomic Strategy Team
6 July 2023
Key takeaways
1. The market is premature in its pricing of dovish pivots from central banks, both in terms of timing and magnitude.
2. There’s a risk that even if the Fed pauses in the coming months, the next move could be more tightening, not easing.
3. Markets need to reassess the central bank put for asset prices.
Semiconductors poised for long-term growth amid AI boom
The global semiconductor industry remains strong – arguably the most robust we have seen in over three decades. This strength is supported by cutting-edge innovation, rising revenues and robust capital spending. While risks remain, the outlook for 2026 appears constructive, with demand for artificial intelligence (AI) applications showing few signs of slowing. Beyond AI, the non-AI markets could be poised for positive revisions as cyclical recovery gains traction after several years of consolidation.
2026 Outlook Series: Manulife Global Multi-Asset Diversified Income Fund
In 2026, a clearer macroeconomic outlook is expected as momentum improves following strong 2025 drivers such as AI growth, energy transition, anticipated Fed rate cuts, and wider fiscal support. While the US Federal Reserve is likely to continue easing policy, diverse income opportunities remain across global markets, extending beyond traditional government bonds to high yield assets and option writing. Within this environment, the Manulife Global Fund – Global Multi‑Asset Diversified Income Fund (GMADI) remains with a clear and heightened focus towards income generation. The Fund seeks to deliver a high and consistent distribution income while maintaining exposure to long term capital growth opportunities.
Where growth meets opportunity: Dynamic leaders and sector winners for 2026
US tech giants, semiconductor leaders, and AI-driven businesses are set for outsized gains as digital transformation accelerates. Broadening sector exposure to communication services, utilities, materials, IT, and financials – areas showing strong momentum and solid fundamentals, suggests room for further upside. We believe active strategies targeting high-quality, industry leaders with strong earnings are well-positioned as market opportunities broaden in 2026.
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Dollar cost averaging: An easier way to withstand volatile markets
If investors wish to reduce volatility and benefit from long-term growth when the markets move up and down, the passive strategy of dollar cost averaging may be a feasible choice.
Risk Diversification
There is no free lunch. But Risk Diversification comes close in investing. A diversified portfolio was shown to optimize returns with lower volatility in the long run.
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