Letter from CIO – Investing in a Changing World Order and a Global Monetary Reset

This article is a summary of the CIO’s letter shared with clients at the start of 2026. It reflects our current thinking on the changing global order, the evolving monetary environment, and the investment themes likely to shape markets in the year ahead. 

The year 2025 was marked by high volatility and a pivotal shift in the global geopolitical and monetary landscape. It was a year that saw the return of forces that had been largely absent for over a decade, reshaping how capital moves across markets. 

Protectionism resurfaced as countries focused on securing strategic resources such as energy and critical minerals. Inflation proved persistent, bringing the era of free money to an end and reinforcing a “higher for longer” interest rate environment. At the same time, fiscal policy increasingly took precedence over monetary policy, as governments sought to drive nominal GDP growth in the face of rising debt burdens. 

After an extended period of low inflation, easy liquidity and subdued volatility, markets adjusted to rising commodity prices, tightening financial conditions and higher yields. This shift laid the foundation for the return of macro investing, a style that had been written off following the Global Financial Crisis. 

Real assets emerged as clear beneficiaries of this environment. Precious metals and industrial commodities significantly outperformed financial assets in 2025. Emerging markets, which had underperformed global equities for many years, also began to show a turnaround as higher commodity prices strengthened sovereign balance sheets and supported currencies, bonds and equities. 

Looking ahead to 2026, a changing world order and the possibility of a global monetary reset stand out as key themes. The unipolar, US-dominated system is gradually giving way to a more fragmented structure, with China becoming more assertive. The post-1971 fiat currency framework is under strain, with parts of the global south moving toward gold-backed systems while Western economies explore stablecoin-backed digital currencies. Such transitions are rarely orderly and often lead to a repricing of hard assets. 

Another important shift is the growing challenge to US exceptionalism in technology and artificial intelligence. Chinese open-source AI models, combined with structural advantages such as low-cost energy, low capital costs, an undervalued currency and a highly productive workforce, are narrowing the gap with Western peers. Despite recent gains, Chinese technology stocks remain attractively valued. 

Real assets are expected to continue outperforming financial assets in 2026. For Indian investors, REITs and InvITs offer an opportunity to combine tax-efficient regular income with long-term capital appreciation yet remain significantly underrepresented in portfolios. 

The AI-led capex boom and re-industrialisation in the United States are also reshaping energy demand. Rapid growth in data centres, electrification and manufacturing has exposed limitations in power generation, transmission and distribution infrastructure, creating long-term opportunities across the energy value chain. 

Emerging markets appear well positioned to outperform developed markets, supported by lower debt levels, healthier fiscal balances, undervalued currencies and a supportive commodity cycle. Within emerging markets, Latin America stands out due to improving geopolitics, strong exposure to commodities and high real interest rates. 

For Indian investors, the coming year highlights the need to broaden portfolios beyond domestic equities. Going global does not imply a negative view on India’s long-term growth story. Rather, it reflects the importance of valuation discipline, diversification and liquidity management in a more volatile and fragmented world. 

For readers who would like to explore the full CIO letter, the complete note is available here.