Top of main content

Investment Monthly: Diversifying further amid evolving geopolitical risks

1 February 2026

Willem Sels
Global Chief Investment Officer, HSBC Private Bank and Premier Wealth
Lucia Ku
Global Head of Wealth Insights, HSBC International Wealth and Premier Banking 

Key takeaways

  • Geopolitical tensions have increased market volatility, with recent developments around Greenland and Iran adding to the complexity. However, we anticipate that any sell-off will be less severe than that of last April. Our investment strategy aims to capture the broadening opportunities driven by AI-led innovation while navigating geopolitical uncertainties through multi-asset diversification, including increased exposure to alternatives and gold.
  • While we remain positive on global and US stocks and continue to position in Asia for geographical diversification, we have adjusted our equity allocation by upgrading Materials across regions and underweighting Europe ex-UK stocks after taking profits on European peripheral markets. UK Gilts have performed well since the Autumn Budget and benefit from favourable tailwinds, supporting our upgrade to overweight, and aligning with our investment grade credit positioning. We also upgrade Japanese government bonds to neutral following the recent sell-off.
  • Asia’s growth drivers remain robust, underpinned by resilient domestic demand and strong AI-related exposure, along with solid upstream industrial activity. Fiscal stimulus, supportive monetary measures and investment boosts outlined in China’s 15th Five-Year Plan provide a positive backdrop for the equity market. Hong Kong China benefits from an improving property market outlook and strong capital inflows. Japan’s expansionary policy and solid earnings growth, South Korea’s rising memory-chip cycle, and Singapore’s safe-haven appeal add to Asia’s allure for investors.

Talking Points

Each month, we discuss 3 key issues facing investors

Chinese equity views herein are from HSBC PB and Wealth Global Investment Committee.

Asset Class Views

Our latest house view on various asset classes

Sector Views

Global and regional sector views based on a 6-month horizon

Start your financial health check

Take your financial health check and that will help you to understand your needs, make and achieve your financial plan.

Wealth Management

Your goals are unique to you. We’ll help you reach them – first by assessing your situation, then by helping you put a plan in place

Related Insights
While we remain optimistic about 2026, supported by strong AI adoption and a favourable...[13 Jan]
The Bank of England (BoE) cut its Bank Rate by 0.25% to 3.75%, while the ECB left policy...[23 Dec]
As a year of surprises draws to a close, it’s a good time to filter out the noise and...[27 Nov]