Asset Allocation Strategy Amid Sino-US Macroeconomic Differentiation in 2026

In 2026, the Chinese and U.S. economies will exhibit significant structural differentiation characteristics:

Structural reform will be the main line, with policies leaning towards conservatism and stability. Based on the latest analysis, China’s economy will bid farewell to unilateral export-driven growth in 2026. The investment gap is expected to be repaired in the first year of the ‘15th Five-Year Plan’, and consumption policy dividends will further narrow the consumption gap, helping stabilize the real estate sector [1]. The improvement in the PPI center and the ‘anti-involution’ policy will ease the prosperity gap between emerging and traditional sectors [1].

The AI investment cycle will continue to drive economic growth. The capital expenditure of the four major North American cloud vendors increased by 62%-75% year-on-year in 2025, accelerating for consecutive years [1]. However, in 2026, it will face a high base, and we need to pay attention to constraints such as the easing of supply and demand relations in the industrial chain and the bottleneck of U.S. power supply [1].

According to the latest market data [0], during the 2024-2025 period:

• The Nasdaq Index performed the strongest with an increase of 55.02%
• The S&P 500 rose by 43.65%, while the Dow Jones Index had a relatively moderate increase of 28.88%
• The Russell 2000 Small-Cap Index rose by 25.73%

Current sector performance shows obvious differentiation [0]:

• Defensive sectors performed well: Healthcare (+0.73%), Real Estate (+0.52%)
• Technology and cyclical sectors were under pressure: Technology sector fell by 1.40%, Financial Services fell by 1.18%

The Shiller P/E ratio of the S&P 500 has reached 39.6, which is the second-highest valuation level in history after the end of 1999 [1]. The pricing of AI-related assets is relatively sufficient, so we need to guard against concentration risks.

• Control the allocation of AI leading stocks within 25%
• Shift to broader market participation and focus on non-AI targets with improved fundamentals
• Consider rotation opportunities in cyclical sectors

The crowding degree of dollar short transactions has decreased, making technical rebounds likely, and central banks around the world have increased flexibility in gold purchases [1]. COMEX copper inventories are at the third-highest level since 2003, so industrial metals need to be treated with caution [1].

• Allocate about 20% to gold ETFs to hedge against macro uncertainty
• Avoid commodity varieties with high macro exposure
• Pay attention to the impact of limited power supply on the development of data centers

Foreign capital is optimistic about the structural opportunities in the Chinese market, and it is recommended to focus on three major themes [2]:

• Chinese enterprises’ overseas expansion enters a golden period
• AI investment logic shifts to the fundamental realization period
• Space for the evolution of new consumption upgrades

• Allocate 10% to emerging market ETFs
• Allocate 10% to Chinese structural opportunities
• Retain flexibility in geographical diversification

Allocate 15% to high-grade bonds to provide income stability and liquidity buffer. In a market environment with high valuations, the defensive value of fixed-income assets is prominent.

Maintain 5% cash and equivalents to provide operational flexibility for market fluctuations and capture opportunities from mispriced assets.

1. Risk of slowdown in the AI investment cycle:
   Industrial investment will not accelerate unilaterally, and the slowdown in growth under a high base may affect related assets [1]
2. Geopolitical risk:
   Although the Sino-US trade environment has improved, we still need to pay attention to policy changes in the mid-term election year
3. Valuation regression risk:
   The overall valuation of U.S. stocks is high, and there is pressure for a technical correction
4. Liquidity risk:
   Changes in the dollar trend and Fed policies may trigger global liquidity fluctuations

• Adopt layered allocation: core positions are relatively stable, while satellite positions are flexibly adjusted
• Set stop-loss mechanisms to control the maximum exposure of single investments and single assets
• Regularly rebalance to maintain the established risk-return characteristics
• Pay attention to changes in macro indicators and adjust tactical allocation in a timely manner

• Gradually reduce positions with excessively high AI concentration
• Increase allocation to defensive assets
• Pay attention to earnings guidance during the earnings season

• Deeply deploy targets benefiting from structural reforms
• Seize valuation repair opportunities in emerging markets
• Increase exposure to cyclical assets at the right time

• Adhere to the concept of diversified allocation
• Pay attention to trends in technological innovation and industrial upgrading
• Maintain balanced allocation across assets and markets

The investment environment in 2026 will be complex and volatile, but structural opportunities are still abundant. The key is to grasp the allocation opportunities brought by Sino-US macro differentiation, avoid over-concentration on a single theme or region, and build a resilient and growth-oriented investment portfolio. Through scientific asset allocation and dynamic adjustment, investors can achieve stable long-term returns in a complex environment.

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[0] Gilin API Data - Market Indices, Stock Quotes, Sector Performance Data
[1] Guo Lei: Narrowing Economic Temperature Difference, Converging Asset Narrative - 2026 Macroeconomic Environment Outlook - Sohu (https://m.sohu.com/a/957820809_465450?scm=10001.325_13-325_13.0.0.5_32)
[2] 2026 Chinese Market Strategy Outlook: Demand-Led Growth - SPD Bank International Research (https://www.spdbi.com/getfile/index/action/images/name/2026年中国市场策略展望：需求引领增长，拥抱新核心资产_浦银国际研究.pdf)