Allianz Global Investors has published its outlook for 2026. The asset manager analyzes the prospects for various stock markets worldwide.
• Allianz Global Investors sees Europe better positioned than the USA thanks to lower concentration risks
• European stocks are valued more attractively across sectors than many US counterparts
• Despite uncertainties, China’s stock market offers opportunities through cheap valuations and strong innovation
Europe before the USA
According to Allianz Global Investors’ 2026 outlook, Europe currently offers a more favorable market structure than the US – primarily due to lower concentration risks. While a few mega-cap stocks dominate the major indices in the US, investors in Europe find a broader and more diversified range of investment opportunities. In addition, European stocks are valued more attractively across sectors than many US counterparts.
Europe is in a phase of transformation. In the wake of geopolitical shifts, the region is striving for more strategic autonomy and is relying on a more expansive fiscal policy. In Germany in particular, extensive spending programs acted as an economic stimulus – not only for defense, but also for the industrial base and infrastructure. Monetary policy also remains supportive: if inflation is controlled, the European Central Bank and the Bank of England can still be expected to adopt a looser course.
USA: High ratings, high concentration
With regard to the USA, Allianz Global Investors urges caution. Stock valuations are high and market concentration is near record levels. Given ongoing tariff effects and expected rising inflation, there is a risk of stagflation – i.e. a combination of weak growth and rising prices.
A selective investment approach is therefore necessary, according to the asset manager. The focus should be on companies that can justify their premiums through fundamental data. Although the AI area continues to offer opportunities and dominates the news situation on the stock exchanges, selectivity is also required here. The long-term strengths of the US remain, but the current equity environment requires caution.
India and China: Underestimated Markets
In Asia, Allianz Global Investors highlights two markets in particular: India and China. India benefits from extremely favorable demographic developments and a booming digital infrastructure. The stock market is highly liquid and diversified, with over 200 stocks with a market capitalization of more than five billion US dollars. The valuations are below global comparative values. The country also benefits from so-called “China + 1” strategies, in which companies diversify their supply chains.
China, in turn, presents itself as a contrary opportunity. Capital outflows and regulatory uncertainties are weighing on the market, but the government is responding with targeted stimulus measures such as interest rate cuts and government-backed ETF purchases. The Chinese stock market is low, attractively valued and underweighted by foreign investors. According to Allianz Global Investors, the country’s innovative strength – especially in the AI area – is underestimated. Local Chinese stocks have recently developed positively, although increased volatility is to be expected.
Overall, from the asset manager’s perspective, Europe, India and China form a convincing framework for equity allocation. While the US struggled with valuation and policy headwinds, these three regions offered diversified and forward-looking investment opportunities.
D. Maier / editorial team finanzen.net
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