① Cambridge Associates, a leading international investment advisory firm, recently stated that global investors should consider reducing their holdings of US stocks, as emerging market equities are expected to outperform developed country equities for the first time in five years against the backdrop of a weakening dollar; ② The firm predicts that "the dollar will fall further in 2026," initiating a bear market that will last for several years; ③ The firm recommends that investors increase their holdings of global non-US market equities in 2026.
Cambridge Associates, a leading international investment consultancy, recently stated that global investors should consider reducing their holdings of US stocks, as emerging market equities are poised to outperform developed country equities for the first time in five years amid a weakening dollar .
Cambridge Global Advisory is a leading global investment advisory and asset management firm founded in 1973 and headquartered in Boston, USA. It is a privately held company focused on the investment field.
The US dollar has weakened significantly this year, with the dollar index falling by more than 10% in the first half of the year, marking its worst performance for the same period since 1973. However, the dollar's trend has stabilized in the second half of the year.
In a report, Cambridge University predicted that "the US dollar will fall further in 2026," triggering a multi-year bear market, citing economic policy uncertainty, overvalued assets, and fiscal pressures that could dampen global demand for the dollar .
A weaker dollar has already benefited non-US stock markets. In 2025, global non-US stock markets are projected to outperform US stocks by 6.6 percentage points in local currency terms and by 13.9 percentage points in dollar terms.
Cambridge University expects this trend to continue and recommends that investors increase their holdings of global non-US stocks in 2026 .
Latin American markets have been undervalued for years, with valuations at 20-year lows, yet they have been among the best performing emerging markets this year – with a year-to-date return of 37%.
Cambridge University stated that, thanks to the deep discounts in stock and currency valuations, coupled with the continued improvement in the macroeconomic environment, the Latin American market still has the potential to outperform the broader market in the future.
Cambridge University also stated that the performance of the US market is heavily reliant on technology stocks, making it vulnerable. The institution further warned that the drivers of US stock market gains... Highly concentrated in a few sectors, especially artificial intelligence This increases the risk of a weakening dollar and the withdrawal of overseas investors once the AI boom fades.
The Trump administration is preparing to appoint a new Federal Reserve chairman. In response, Cambridge University points out: "Regardless of who becomes the Fed chairman, lowering interest rates and pushing for a weaker dollar are established goals of the Trump administration, aimed at reducing the US trade deficit and promoting the recovery of domestic manufacturing."
Cambridge University's perspective and Fidelity International consensus is emerging. Matthew Quaife, Global Head of Multi-Asset Investment Management at Fidelity International, said last week that Asian markets are expected to rise further next year, benefiting from a weaker dollar and a potential multi-year investment cycle in artificial intelligence .
“We believe the US dollar will remain relatively stable in 2026, but will weaken overall. This will benefit Asian stock markets,” Quaife said.
Quaife also expressed optimism about the Chinese stock market, especially Chinese technology stocks .
“International investors are returning to the Chinese market. With China’s macroeconomic fundamentals stabilizing and the rapid advancement of the artificial intelligence industry cycle attracting global attention once again, now is an opportune time to increase holdings of Chinese technology stocks,” he said.
(Article source: CLS)
