(Yicai) Jan. 21 -- China and Japan tied for first as expected best-performing markets this year, according to the latest survey by the Investment Management Association of Singapore on executives from its 63 member companies, which manage a total of USD35 trillion.

Twenty-one percent of survey respondents voted China and Japan as the best-performing markets to invest in in 2026, according to the 11th edition of the Investment Managers' Outlook Survey released by the IMAS yesterday. India ranked third with 13 percent, and Singapore and China's Taiwan fourth at 11 percent.

Seventy-three percent of the polled executives expect the Morgan Stanley Capital International China Index to grow between 10 percent and 20 percent, while 72 percent of them believe the MSCI Asia Index ex Japan will advance that much.

Despite that, 61 percent of respondents do not expect China's gross domestic product growth to accelerate, suggesting that equity optimism is driven by valuations, policy support, and sector-specific opportunities rather than macro momentum, the survey findings showed.

Executives are more and more concerned about geopolitical risks, as 85 percent of them expect heightened volatility to shape macro sentiment and risk positioning throughout the year.

"The survey results demonstrate that fund managers are successfully adapting to sustained uncertainty, identifying high-conviction opportunities in Asia even as geopolitical risks escalate," said Jenny Sofian, chairperson of the IMAS.

"For Singapore-based managers, this environment coincides with persistent margin pressures and operational complexity, necessitating a shift from experimentation to disciplined execution," she noted. "The focus is now on scalable business models and the practical deployment of artificial intelligence to deliver measurable productivity gains."

AI remains the central conviction among polled executives, as three in four of them disagree that the AI bubble will burst this year, underscoring confidence in AI's role as a productivity and cost-efficiency catalyst across industries.

More than half of surveyed fund managers now deploy AI in core investment processes, including research insights and fund commentary, and as many use it to enhance productivity across distribution, compliance, and human resources functions. Advanced analytics, machine learning, and AI, including generative AI, were their top three fintech interest areas.

Sixty percent of the executives expressed anxiety that major central banks' independence may erode in 2026, reflecting worries about political interference in monetary policy.

Despite mixed views on global inflation, 97 percent of industry participants expect the Federal Reserve to continue easing, with 69 percent anticipating rate cuts exceeding 0.5 percent by the end of the year.

Editor: Futura Costaglione