Equity risk is still undeniably the biggest concern for asset owners with half the respondents identifying it as the biggest threat to their portfolio in the year ahead. 

Part of the concern is around valuation and concentration, but also liquidity, M.J. Murdock Charitable Trust CIO Elmer Huh says.

“A lot of folks like us have public equity because they don't want to park the liquidity asset into just cash or fixed income. They want higher yielding, so the valuation and the liquidity are kind of tied at the hip because of that,” he says.

“There's not a better alternative for higher-yielding, liquidity-holding [assets]. You can do high-yield [bonds], but that is somewhat highly correlated to equity nowadays.”

QIC’s Allison Hill says technology companies’ valuations are “fairly full” and the fact that there has been significant stock dispersion underneath indices in recent weeks suggests investors are starting to be more selective within the AI thematic. But still, it’s difficult to hedge the equity risks. 

“Equity markets are a large slice of our portfolio, notwithstanding we try and diversify as much as we can, we still are quite exposed to equity markets,” QIC’s Allison Hill says.

Meanwhile geopolitical risk has risen to the second most important risk for asset owners, with twice as many respondents ranking it as the biggest risk to their portfolio as the 2025 survey. Private market liquidity concerns ranked third in 2026, having not previously ranked as a top risk the previous year.

Notably, there is a geographical divergence in terms of which risks asset owners think are the most tangible threats to their portfolio. While Asia Pacific respondents are more worried about equity risk (over 56 per cent of respondents in the region cited the concern); Europe, the Middle East and African-based asset owners are more focused on geopolitical risks – potentially due to proximity to the Ukraine and Iran wars. 

In response to geopolitical risks, the most common course of action from investors is allocating less to the US (27 per cent), followed by a higher liquidity buffer (12 per cent) and reweighting country exposures (6 per cent). 

More investors are planning to crank up risk (26 per cent) to achieve their investment objectives, as positive sentiment around increasing risk reached a five-year high. 

“I can't speak for any other CIO, but I am willing to wager that the perspective or the sentiment that people expressed, and part and parcel of my own thinking, is that each of us has this view of you control what you can control, and the rest of what you can't control, you don’t worry about it,” Huh says. 

“We're all in the business of trying to create alpha and manage the beta, but when the beta becomes unpredictable, that is where the uncertainty comes from.

“Right now, we're probably in an environment where geopolitics, fiscal, monetary and foreign policy have been repeatedly questioned in the public as being unpredictable… they have a ripple effect into [your risk perception], and your ability to make sense of anything becomes less and less affirming.”