J.P. Morgan released their Global Alternatives Outlook report last week outlining those global trends for 2026 yet investor trends for GCC clients remains murky.
Finance ME spoke to Steven Rees, the Managing Director, Head of Investments, MENAT for J.P. Morgan Private Bank, to understand which of these investment opportunities align for investors in the GCC.
JP Morgan’s 2026 Global Outlook
There are many opportunities next year despite the uncertainty and quite a bit of volatility that we have seen this year.
For our clients, J.P. Morgan is advising clients to stay invested and to stay global, Rees said.
We are making a big push towards owning investments across the world and that is pretty much every region. We have a real preference to be balanced for next year.
In between what we call equity and fixed income – those multi-assets – the idea of owning both equities and fixed income is a sensible strategy which worked well in 2025.
Shifting Portfolio Patterns (2025 to 2026)
Contrary to 2025, J.P. Morgan is advising clients to take a more diversified approach to the equity market exposure they have whereas this year it has been all about tech driving the market, Rees said.
“Going forward we see, you know, we see other areas driving in addition to technology: sectors like global healthcare, the financial sector, and utilities in industrials. We are recommending clients take a much more diversified approach to their equity exposure.”
More Valuation, Not Risk
Pressed on risk exposure, Rees said the firm’s advice is targeting “valuation opportunities,” we see, in other sectors.
Deceleration of Tech Growth
According to Rees, there are improving earnings growth across other sectors.
A year ago, if you take the tech sector, it was growing in the high 20s but over the course of 2025 we have seen the two sides converge. Technological growth has decelerated a bit, still very strong, but closer to 20%.
However, the rest of the sectors are accelerating from 2-3% up to 10%. Rees went on to point this out as a “convergence of growth.”
JP Morgan is advising to really diversify your exposure in 2026 and own the entire market, as a lot of our clients are concentrated in tech and AI.
Portfolio Exposure to AI
The impact of AI is too big to fail it seems.
Pressed on it’s advisory to clients on AI securities, Rees outlined the impact of AI in the region.
“Our view is AI, if you want to have exposure, it is too big to ignore. It is our view, that we are cautioning clients to be selective but also diversified in terms of how they get the exposure,” Rees said.
Therefore, we are not recommending clients go concentrated and go after one company, but to look at “buying a handful of companies that are aligned to the AI space that we think will benefit over time,” he said.
Recently, many GCC portfolios remain structurally overweight to U.S. technology following the AI-driven rally. Investor sentiment in AI is well-placed, as GCC sovereign wealth funds – such as Mubadala and QIA – investing heavily in U.S. AI firms and AI infrastructure yet portfolio diversification is essential.
Goals-Based Planning: Advising Clientele
On having a diversified portfolio, pricing in risk can be difficult.
Goals-based planning demands a sort of internal framework, which takes a client’s goals and what they want to achieve with their wealth, which is married with the firm’s research, insights, and implementation.
Reaching our clients’ goals in the least volatile way with the highest probability of achieving outcomes is the goal, said Rees.
Infrastructure Hedge Funds in 2026
2026 demands ways of lowering risk following 2025.
Attracting areas of investment that are less correlated with the global market is a plus, said Rees.
Possible investment areas that disassociate from risk adverse markets include infrastructure hedge funds, which is a “big focus item for us in 2026” because you can get “equity-like returns with a lot less volatility.”
Infrastructure hedge funds are key themes for MENAT state and private investors.
Not only do investments in supply-side hedge funds diversify beyond volatile equities, like stocks and real estates, but hedge funds are inflation adjusted whilst linking investors to state-backed sovereign wealth funds namely Mubadala or the PIF.
MENA sovereign wealth funds, all five of the ‘Oil Five’ located in the GCC, have increased hedge funds allocations by 11%: the highest global share of sovereign capital in hedge funds recorded in 2024.
DIFC recorded its 100th hedge fund this week as investors. As equity markets rebound in 2026, future proofing volatility is key to sovereign wealth-backed investment into hedge funds or at the very least, partnerships between the two verticals.
A Weakening Dollar Shifts Investment Priorities
The U.S. dollar’s ongoing depreciation is shifting financial advice.
According to Rees, we have started to recommend more kind of new non-U.S. dollar assets in the portfolio to benefit. For instance, European equities can provide steady returns in Euros but then also when you convert these stocks to dollars, you can capitalise from the weakness of the U.S. dollar.
The GCC continues to use alternative methods of exchange, on-chain, via CBDCs and crypto at the corporate level. This is yet to be rolled out to consumers.
2025 has been a “massive year for dollar weakness,” but we expect it to weaken going forward, but not to the same level that we have seen this year. Rees went on to say that currency strategists are expecting a 2-3% weakness whilst advising clients to go through areas like Europe, Japan, and even China.
Investment Priorities for the Next 5-10 Years
In the next 10 years, exposure in AI is paramount.
Making sure you are positioning today to capture a “robust, diversified portfolio” of private exposure is key since a lot of AI companies are still private.
Yet Rees forewarned an unexpected global crisis in the next five to ten years. To mitigate against this risk, Rees is advising clients to build a resilient portfolio complementing that risk with hedge funds, infrastructure, gold, fixed income, and portfolio stabilisers.
This is the shift from return maximisation to outcome certainty.
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