Amid global uncertainty, fund managers look to Asia for growth

As 2026 begins, the continued geopolitical tensions around the world has investors turning towards Asian markets with optimism, according to the latest survey by the Investment Management Association Singapore (IMAS). The survey, which gathered responses from 63 fund managers overseeing more than US$35 trillion globally, reveals where industry leaders see growth potential and their predictions for businesses in the year ahead. Within this landscape, Japan and China stand out for their high-growth potential, while Singapore is viewed as a stable anchor.

Japan and China emerge as the region’s most compelling markets, with 21% of respondents voting for them as best performing markets. This is likely due to technology trends worldwide. The demand for products such as artificial intelligence and electronic vehicles, mean that these countries will continue to see investor interest.

Respondents bring this confidence to their forecasts of regional indexes: 72% expect the MSCI Asia ex-Japan Index to rise 10–20% by year-end, while 73% projecting similar growth for the MSCI China Index.

Notably, even as investors are optimistic about Chian’s market performing well, a majority of respondents do not anticipate growth in China’s GDP. IMAS representatives believe this is due to continued sluggish domestic consumption, which contrasts with their strong exports.

Unfortunately, respondents don’t have the same optimism for Southeast Asia. A fourth of respondents believe that Thailand will be the worst performing market in 2026. Indonesia sits at second expected worst performing market, with a fifth of votes.

Singapore, by contrast, is widely seen as a stable, if less explosive, market. It ranks as the third expected best performing market in 2026. Close to 9 in 10 respondents expect the Straits Times Index (STI) to strengthen 5-10% by the end of the year; in fact, the index has already hit a record high of this month.

While countries such as India and Taiwan best Singapore, with a higher percentage of respondents voting for them to be best performing, their rankings are offset as a similar proportion of respondents also voted for them to be worst performing. In India’s case, 13% believed it would be the best-performing market — and 12% voted that it would be the worst.

In addition to examining macroeconomics, the report also asks fund managers for their perspective on developments that will affect businesses, with a particular focus on artificial intelligence. 76% of respondents do not believe that the AI bubble will burst in 2026, with a significant number saying they do not view the sector as a bubble at all. It is also likely that companies will increasingly look to hire talent capable of leveraging AI tools.

Other notable trends is ESG. As commonly speculated when the terminology first became widely discussed, ESG has become necessary for businesses as governance and disclosure requirements are established, influencing investment and operational decisions.

“The survey results demonstrate that fund managers are successfully adapting to sustained uncertainty, identifying high-conviction opportunities in Asia even as geopolitical risks escalate,” said Jenny Sofian, Chairman of IMAS.

“For Singapore-based managers, this environment coincides with persistent margin pressures and operational complexity, necessitating a shift from experimentation to disciplined execution. The focus is now on scalable business models and the practical deployment of AI to deliver measurable productivity gains. In an intensifying competitive landscape, the winners will be those who can marry sound investment judgment with technology-enabled operational efficiency.”