February 2026 monthly investment insights

Zurich’s monthly investment update aims to simplify recent market movements and outline how they may influence investor portfolios. Whether investors are new to markets or long-established, this update offers context and insights to support informed financial decisions.

From major market moves to emerging trends, today we're going to break down what's happening and what it could mean for your portfolio.

Market overview

When asked to summarise market activity since the start of 2026, Daniel noted that the year has already been: “very eventful.” His review focused on:

• Equity market performance
• European government bond returns

These asset classes have shown distinct return profiles, reflecting shifting macroeconomic expectations and investor sentiment.

Asset class performance

Daniel highlighted comparative relative returns between:

• Global equities
• European government bonds

This framing helps investors understand how risk assets vs. defensive assets have behaved in early 2026.

Currency insights

A key discussion point was the US dollar’s relationship to the euro. noted: “We can expect this to lead to a further weakening of the dollar against the euro… something to keep in mind.” This expectation reflects evolving rate differentials and macroeconomic conditions.

Opportunities for 2026

1. AI Monetisation “AI monetisation is a huge point of focus for the market at the moment. If companies like Google, Microsoft, and Amazon successfully convert AI investment into revenue, investor skepticism may ease,” Daniel said.
2. Stabilising US inflation A return toward the Federal Reserve’s 2% target could significantly improve consumer confidence and equity market sentiment.
3. Easing trade tensions If recently re-emerging tariff tensions dissipate, markets may benefit from reduced uncertainty.
4. Eurozone infrastructure spending

The Eurozone’s fiscal reform efforts could boost economic growth — but only if planned spending materialises.

Risks to monitor

1. Overexuberance in AI “We’re likely going to live through the highest CapEx periods of our time in terms of spending on AI,” Danial explained. Markets remain uncertain about whether this investment will deliver sufficient returns.
2. Renewed trade tensions Tariff-related uncertainty has already re-entered the market landscape and may escalate.
3. German fiscal stimulus risks While removing the debt brake was a positive signal, the key question is whether it leads to actual economic growth.
4. Geopolitical instability Geopolitical tensions remain elevated in 2026, especially the US–Iran situation, which Daniel highlighted as a “key point of focus.” Geopolitical considerations 2026 has already offered meaningful geopolitical shocks.

These events have implications for:

• Energy markets
• Global supply chains Investor risk appetite

Daniel emphasised the importance of global awareness in managing portfolios throughout the year.

Zurich's fund range Yearly investment outlook