Welcome to a pivotal moment in investing, where the horizons of opportunity stretch far beyond familiar shores.

Diversification beyond U.S. markets has become an essential strategy, driven by a world in flux.

In 2026, global growth projections of 2.6% to 2.8% signal a landscape ripe with potential for those who dare to explore.

This handbook is your guide to navigating these uncharted waters, offering practical insights and inspiration to build a resilient, globally-focused portfolio.

The Imperative of Diversification in 2026

The investment climate is evolving rapidly, challenging traditional approaches and demanding a broader perspective.

Geopolitical tensions and trade fragmentation are reshaping economic flows, increasing volatility in concentrated markets.

To thrive, investors must look outward, embracing a mosaic of international opportunities.

Consider these compelling reasons to diversify globally in the coming year:

• Enhanced risk management through exposure to diverse economies and sectors.
• Access to higher growth rates in regions outperforming the U.S., such as emerging markets.
• Valuation disparities favoring international stocks over expensive U.S. equities.
• Policy-driven tailwinds from fiscal packages and central bank actions worldwide.

By adopting this mindset, you can mitigate risks and uncover hidden gems across the globe.

Unlocking Regional Gems

Specific regions stand out for their robust growth prospects and attractive valuations in 2026.

Each offers unique drivers that could propel investment returns beyond domestic benchmarks.

• Europe: Poised for acceleration due to ECB rate cuts and Germany's $1.3 trillion fiscal package, targeting infrastructure and green energy.
• Emerging Markets (EM): Turning a corner with strong performance in debt and equity, supported by a services export boom.
• Japan: Benefiting from corporate reforms and fiscal expansion, with TOPIX expected to gain +7%.
• U.S. Smaller-Cap Stocks: Leading globally, recommended for overweight positions despite international peers.

To visualize these opportunities, refer to the table below, which summarizes key data points.

This data underscores the importance of a regional approach to capture growth.

Sector and Asset Class Insights

Beyond geography, certain sectors and asset classes present compelling prospects for 2026.

Global equities positive with double-digit gains in developed and emerging markets, as forecast by top firms.

International value often shines brighter, offering a hedge against concentration risks.

• Equities: Expect outperformance in non-U.S. markets, with international value leading the charge.
• Infrastructure: Robust outlook from AI power demand, decarbonization, and policy support, especially in European logistics.
• Innovation and AI: Reshaping economies beyond tech, driving productivity gains and dispersion across industries.
• Private Markets and Alternatives: Opportunities amid geopolitical risks and trade reconfiguration.
• Fixed Income and Credit: European credit may surpass U.S. due to M&A surge, with emerging debt also attractive.
• Real Estate: Strategic opportunities identified in outlooks like Hines, focusing on sustainable assets.

Each sector offers unique entry points for diversified portfolios.

Navigating Risks and Opportunities

The economic macro context provides both tailwinds and headwinds for global investors.

Growth projections show resilience with global rates at 2.6% to 2.8%, though developing economies ex-China expand at 4.2%.

Policy tailwinds, such as U.S. fiscal synergy and ECB easing, create favorable conditions.

• Trade Trends: Subdued growth but opportunities in servicification, green transitions, and value chain diversification.
• Valuations: International stocks are attractive vs. U.S., with selective approaches key post-2025 strength.
• Risks: Include geopolitics, tariffs, slower major partners, USD choppiness, and policy uncertainty.

Eurozone manufacturing loss to China is a specific risk, but it opens avenues for strategic shifts.

By understanding these dynamics, you can balance risk and reward effectively.

Contrasting Perspectives from Top Firms

Different financial institutions offer varied views on the 2026 outlook, enriching strategic decision-making.

This diversity highlights the need for a nuanced approach to global investing.

These perspectives remind us that flexibility and research are paramount in a complex world.

Practical Steps for Global Investing

To capitalize on these opportunities, adopt a structured and actionable approach.

Diversification benefits from multi-country strength are well-documented, reducing portfolio volatility.

• Investment Vehicles: Utilize ETFs, mutual funds, and separately managed accounts for efficient international access.
• 2026 Catalysts: Focus on AI productivity, central bank lags, fiscal packages, reforms, and M&A resurgence.
• Handbook Structure: Start with risk assessment, then deep-dive into regions and sectors, supported by forecasts.
• Warnings: Be mindful of volatility in smaller economies and maintain a balanced portfolio.

Non-U.S. markets represent the bulk of listed stocks, offering a vast opportunity set for growth.

By embracing these steps, you can navigate 2026 with confidence and purpose.

Let this handbook inspire you to build a future where your investments reflect the world's rich diversity.

The journey beyond borders begins with a single step—take it today.