The British manager Schroders has identified U.S. small-cap companies ('small caps'), emerging markets, and Japan as the big winners of equities in the first half of 2026.
In a recent report, the firm estimates a rise of nearly 23% for U.S. small caps, just one point below the advance of large-cap companies ('large caps') in emerging markets (24%) and seven points above the rebound of 16% recorded by Japanese large caps in the first six months of the year.
Although small listed companies have shown very solid performance, large U.S. companies have only managed to appreciate by 10% until June. "Returns have diversified in the U.S., but they remain very concentrated in emerging markets," noted the Director of Strategic Research at Schroders, Duncan Lamont.
The study also highlights that, in addition to these two blocks, growth companies ('growth') and equal-weighted indices in the U.S. advanced by 9% and 11%, respectively. In contrast, the "Magnificent Seven" --Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla-- exhibited "below expectations" performance, with a return close to 0% in the first half.
In detail, Tesla (-6%), Meta (-15%), and Microsoft (-23%) experienced the sharpest declines until June. On the opposite end, Alphabet led the increases with 14%, followed by Nvidia and Apple (+7%) and Amazon (+3%).
According to Schroders' calculations, if these seven large tech companies were excluded from the universe of U.S. large caps, the performance of this segment would have improved to 15%.
For the entire U.S. stock market, without differentiating by styles or sizes, the fund manager projects a revaluation of 24% by the end of the current fiscal year and an additional 19% in 2027.
Emerging markets: potential for an increase close to 60%
In the emerging universe, growth companies recorded the best stock market performance, with an advance of 25%. Very close were the large caps (+24%), followed by value (+23%) and small caps (+13%).
However, Lamont has emphasized that more than 80% of companies in these markets have offered a return lower than that of the general index, as the good tone of the market is concentrated in a small group of semiconductor firms from South Korea and Taiwan.
Looking at the end of the year, the head of Strategic Research expects that companies in developing economies will accumulate a revaluation of over 60%, to which an additional 23% would be added in the following fiscal year.
"Profit forecasts for 2026 continue to be revised upwards in many markets. Emerging markets are booming," Lamont has highlighted.
Europe and the UK lagging behind the stock market rally
In Europe --excluding the UK--, Schroders points out that the 'value', 'large caps', and 'growth' segments were the best performers until June, with an increase of 9% in each case. In contrast, 'small caps' companies showed a more moderate advance, limited to 4%.
In the British equity market, the report places the 'value' index as the standout of the first half, with a rise of 10%. Next are large companies (+6%), small-cap companies (+2%), and growth profile companies (+1%).
By sectors, the strategist highlights that all sectors that closed the first quarter in negative territory moved to positive ground in the second, with particular prominence of the technology sector.
The latter recorded an appreciation close to 30% in the first half of the year, followed by the energy sector (+18%), industrial (+16%), utilities (+9%), materials (+7%), real estate (+6%), consumer staples (+5%), financial (+4%), and health (+3%). On the downside, the first six months ended with declines in communication services (-2%) and discretionary consumption (-5%).