UniSuper’s chief investment officer, John Pearce, believes an artificial intelligence-driven supercycle will bolster equities this year, offsetting concerns about a Trump administration-influenced Federal Reserve. UniSuper is one of Australia’s largest superannuation funds, managing over $150 billion in investments for approximately 670,000 members. The fund provides superannuation services to employees in the higher education and research sectors. Pearce notes that global markets have demonstrated resilience, weathering factors such as wars and trade tariffs while still achieving double-digit growth for investors who can tolerate volatility. The S&P 500, for example, saw a 17 per cent increase last year.
Pearce anticipates similar conditions in 2026, combined with decent GDP growth, setting the stage for a positive year for markets. However, he cautions that ‘the easy wins have been had on monetary policy’, suggesting that interest rate cuts may be ‘probably over’ in Australia, Canada, and Europe. He identifies the United States as an exception, where the outlook is more politically influenced, particularly given President Trump’s pressure on the Fed to lower rates.
While major Wall Street banks are forecasting growth this year, Australian market strategists expect more modest gains, with potential interest rate hikes looming. Morgan Stanley equity strategist Chris Nicol is optimistic, raising his 12-month target for the ASX 200 to 9250 points, implying a roughly 6 per cent rise. Nicol attributes this to a continuing earnings recovery and strong US equity leadership.
However, not all analysts are as bullish. MST Marquee strategist Hasan Tevfik forecasts the ASX 200 to remain flat, trading around 8600 points by year-end. Tevfik argues that high valuations may deter further investment, with reduced superannuation inflows and the derating of high-multiple growth stocks acting as headwinds.
