Investing in an age of cycles, halos and moonshots

ARE you ready to head bravely towards 2030 in an era of geopolitical contests, weaponised choke points, economic shocks and climate stress?

Mind-boggling advances in the artificial intelligence-driven race will propel individuals, businesses and governments, while innovative energy sources drive advances in the space, quantum and longevity economy.

As global hegemons and middle powers jostle for significance in the coming years, investors will contend with interdisciplinary connections between science and innovation, global trade and supply chains, fiscal indebtedness and macro policy, and health and demographics.

This calls for a fresh approach to distil cross-asset factors and risk premia within investment portfolios.

In the third year of convening Bank of Singapore’s CIO Global Advisory Council, we outline the latest 2026 supertrends.

These are five-year structural shifts that intertwine to inform our strategic decisions on allocating capital, managing portfolio risks and identifying potential growth opportunities.

1. Navigating choke points

Today’s volatile world order contrasts with the US-led order that prevailed from the 1990s to the 2010s. Rising tensions and outright conflicts prevail as countries weaponise choke points to control energy supplies, semiconductor chips and critical minerals.

The shocks of the Covid-19 pandemic; Russia’s invasion of Ukraine in 2022; the Gaza war in 2023; the US tariffs in 2025; and this year’s US-Iran war have forced governments to raise their spending on defence, supply chains and healthcare, while managing climate change, ageing societies and immigration flows.

This new world order will lead to rising budget deficits, political pressure on central banks, persistent inflation, higher long-term government bond yields, stockpiling of commodities and strong demand for safe havens including gold, the Swiss franc and the Singapore dollar.

Recent hawkish rhetoric by US Federal Reserve chair Kevin Warsh and higher real rates could support a modestly stronger US dollar over the next 12 months and a cautious stance on gold in the near term.

However, fiscal sustainability concerns imply a multi-year downtrend for the US dollar, and volatile long-term US Treasury yields.

2. A whole-portfolio approach

The backdrop of idiosyncratic risks, rising cross-asset correlations, convergence of public and private markets and overlapping exposures is testing investment portfolios that were built in a piecemeal way.

Asset class diversification can mask deep concentration in shared return drivers – such as growth, credit and liquidity – that move together precisely when resilience matters most.

This whole-portfolio approach (WPA) in building portfolios for wealth investors takes a fresh look at asset allocation, by looking through labels to the underlying drivers of investment return and risks.

By mapping every holding to its true risk premiums and factor exposures, the WPA results in genuinely diversified portfolios designed for resilience.

It draws inspiration from the “total portfolio approach”, which is adopted by institutional investors, pension funds and insurers that have moved away from the siloed benchmark-driven asset allocation to holistic outcome-driven frameworks.

We believe structure and flexibility are not trade-offs. A robust strategic asset allocation anchors long-term objectives and risk, while a disciplined risk-aware tactical asset allocation overlay adapts to evolving conditions.

3. China’s renaissance

As global investors seek diversification, North Asia’s rise into advanced manufacturing to support AI developments will be a significant return driver.

More specifically, China has emerged from a period of economic recalibration into a renaissance phase marked by a cultural revival of all things Chinese, and economic prosperity from value-added products and services amid a digital economy.

This is complemented by the strengthening Chinese renminbi. Cyclical headwinds such as real estate, shifting consumption and regulatory changes are beginning to fade, while new structural drivers – in AI-driven breakthroughs and corporate restructuring – gain traction.

China’s external sector strength has been built on global leadership in tech and AI-driven technologies and advanced manufacturing, encompassing areas such as electric vehicles, batteries, solar equipment, industrial machinery and robotics.

Compared to global peers, AI benefits in China will be diffused rather than concentrated, resulting in a broad productivity uplift and whole-of-supply-chain competitiveness.

Cultural revival is also reshaping consumer horizons and boosting domestic tourism.

The guochao movement is characterised by a surge in cultural pride and the incorporation of traditional Chinese aesthetics into modern products, signifying a shift towards domestic brands and boosting consumer industries.

4. AI anything, everywhere, all at once

The broadening AI trade to AI-inference beneficiaries, beyond graphics processing units, is supported by explosive compute growth and agentic AI developments.

Investors can now participate in the AI growth in a diversified manner across sub-segments and companies, while adjacent sectors supporting the data centre build-out, from power to cooling solutions and critical minerals, benefit from resource constraints and regulatory developments.

Our positive stance on the secular AI trend is balanced against caution over near-term risks such as increased reliance on debt, access to power and water, slower-than-expected monetisation across the AI tech stack and potential obsolescence.

Within investment portfolios, AI exposures that cut across equity positions, investment-grade fixed income and private markets portfolios should be calibrated appropriately.

Recent volatility in semiconductor stocks in South Korea and Taiwan demonstrate the vulnerabilities of crowded positioning and leveraged exposures.

Hence, investors should avoid concentration risks within AI investments, while being selective in diversifying across the AI ecosystem.

5. The longevity economy

Given increased life expectancy and declining fertility, the longevity economy is poised to grow from US$3 trillion in 2025 to US$5.4 trillion by 2034, unlocking significant global economic transformation.

At the individual level, health and wealth underpin quality living and are increasingly augmented by travel and experiential spending in extended “golden gap years”. This supports structural growth across healthcare, nutrition, financial services, travel and leisure.

Silver tourism may combine healthcare and hospitality, interspersing tourist activities with medical procedures targeted at health and well-being.

These may include medical services such as diagnosis and treatment, and auxiliary services such as alternative medicine and thermal facilities.

At the societal level, robotics and AI are emerging as critical enablers, augmenting the capacity of an ageing and shrinking workforce while elevating the contribution of experienced talent.

As populations transition towards retirement, financial institutions are pivoting from simple wealth accumulation to complex decumulation, longevity risk management and intergenerational wealth transfer services.

Governments will gradually be challenged to pare down financial support for the elderly population as the fiscal burden rises.

This pivot from public to private pension systems will benefit wealth management and insurance companies that cater to the rising proportion of senior citizens seeking steady income opportunities.

In a world prepared to wield choke points as bargaining chips and deploy capital for ambitious moonshots, transparency and trust will be the most reliable currency for the young and the young at heart.

As long-term investors, these structural trends are perspectives that can be put into practice: with discipline, coherence and a clear view of what investors ultimately experience into their wealth portfolios, for this and future generations.

The writer is global chief investment officer, Bank of Singapore