Cogence 2026 Market Outlook: Building resilience in a year defined by structural change

Structural forces are reshaping global markets at a faster pace, with artificial intelligence (AI), geopolitical fragmentation and the energy transition influencing investment outcomes. These forces continue to advance within real-world constraints including energy capacity, grid bottlenecks, regulatory constraints and financing constraints.

The Cogence 2026 Market Outlook, in collaboration with BlackRock and RisCura, sets out how these dynamics are shaping the investment environment and how advisers can position portfolios to remain resilient amid rapid structural change.

AI: From mega theme to macro engine

“AI now sits alongside the energy transition, demographic shifts and geopolitical realignment as a defining mega-force. The BlackRock Investment Institute estimates that if AI adds around 1.5 percentage points to US growth, it could lift revenues by more than US$1 trillion per year – sufficient to justify the scale of current and planned investment,” says Jonel Matthee-Ferreira, CEO and CIO of Cogence.

The Market Outlook highlights a number of constraints that will shape outcomes:

• Energy supply: Data centre electricity demand could make up about a quarter of today’s US electricity consumption by 2030.
• Infrastructure limitations: Grid bottlenecks and slow permitting may delay rollout.
• Capital intensity: The cycle requires substantial upfront investment before revenues materialise.
• Geopolitical divergence: Markets with more reliable, lower-cost energy systems may maintain a competitive advantage.

Selective emerging markets (EM) opportunities in a fragmented global environment

“We are seeing global monetary policy paths diverge. Europe is easing into slow growth, Japan is gradually tightening and China is applying targeted stimulus. These dynamics are shaping EM performance,” notes Matthee-Ferreira.

Following a strong 2025 marked by falling inflation and firmer currencies, EM fundamentals remain constructive in 2026. A weaker dollar and lower US rates continue to provide support, alongside stronger sovereign balance sheets after several ratings upgrades. Hard-currency debt still offers attractive income, given limited new issuance.

Diverging fiscal and inflation paths across EMs highlight the need for greater granularity. Relative-value decisions across currencies and credit matter more than broad regional positioning.

South Africa: Constructive outlook with structural opportunities

South Africa begins 2026 with inflation aligned to the South African Reserve Bank’s 3% target, supported by disciplined policy and favourable global food and energy prices. The opportunity set aligns with global structural forces.

“We are seeing the energy transition accelerate investment in renewable generation, grid expansion and alternative power solutions. Private credit and private-market strategies are becoming more relevant as businesses diversify funding sources. South Africa also has significant potential in critical minerals linked to the AI supply chain, including manganese, platinum group metals and vanadium,” says Matthee-Ferreira.

“South Africa remains well-positioned in the current global environment. A more favourable rate cycle, elevated real yields, supportive currency valuations and commodity exposure form a coherent investment case. Local bonds continue to offer some of the highest real yields in EMs, while local equities provide a relatively attractive entry point,” she continues.

Several factors still require monitoring, including fiscal pressures, infrastructure bottlenecks and energy reliability. Alignment with global themes strengthens opportunity, but also increases sensitivity to global liquidity and growth conditions.

Building resilience: Beyond traditional diversification

Traditional equity bond correlations have weakened, making enhanced diversification essential. Public markets remain the core of portfolio construction, with private equity, private credit and infrastructure enhancing, not replacing, these exposures. Together, these private market strategies support income resilience, add differentiated return drivers and offer access to assets linked to long-term structural demand for power, grid capacity and data networks.

“In 2026, building resilience is critical. From the acceleration of AI investment to a more constructive backdrop in South Africa and selective opportunities across EM markets, the Cogence 2026 Market Outlook reinforces our commitment to providing clarity in a fast-evolving market environment,” concludes Matthee-Ferreira.