The second panel at the HKMA Investment Forum in Hong Kong on 4 November 2026 moved from the immediate noise of the US midterm elections to the structural questions shaping portfolio construction and the asset-management industry. Moderated by Martin Matsui, former chief strategy officer of the Exchange Fund Investment Office at the Hong Kong Monetary Authority, the discussion brought together Gregory Bond of Man Group, Hendrik du Toit of Ninety One, Katie Koch of TCW and Andrew Schlossberg of Invesco.

Katie Koch distinguished short-term market reaction from longer-term fundamentals. Avoiding a Democratic sweep would likely produce a relief rally by reducing the risk of abrupt policy change. She also highlighted a more durable issue: the social licence for AI infrastructure. Roughly two-thirds to three-quarters of Americans view nearby data-centre construction negatively. Without a positive narrative that links AI to tangible public benefits, political and community resistance could become an impediment to US growth. She noted that AI remains important for national security and for the country’s growth trajectory.

Andrew Schlossberg added a historical perspective. There have been nineteen US midterm elections since the Second World War. In every case, US equities were higher one year later, regardless of the political outcome. He advised investors to focus on the micro rather than the macro.

Andrew Schlossberg described Invesco’s onshore Chinese business, built over twenty-five years and now managing approximately one trillion renminbi for domestic investors. The original conviction has been validated. He framed the commitment as long-term.

Gregory Bond focused on Man Group’s approach: generating scalable alpha in a discerning market, maintaining on-the-ground presence in Hong Kong and Shanghai, and using the franchise as a source of investment talent. He did not characterise the opportunity in multi-decade terms.

Hendrik du Toit and Katie Koch both pointed to healthier fiscal metrics in many emerging markets relative to developed sovereigns. Emerging economies, having been unable to practise the same degree of monetary accommodation after the pandemic, currently display greater robustness. Koch noted that deficits average around 3.5 per cent in emerging markets versus more than 6 per cent in developed markets, and that debt-to-GDP stands near 60 per cent versus 112 per cent. She reported that the local emerging-market debt market covers about 21 countries and is larger than the US aggregate bond market.

Koch said interest is increasing at TCW from sovereigns, pensions and individual clients, driven by resilience and the search for diversification. She was careful on the AI point: she would not claim that emerging-market debt offers full diversification from the AI trade, only that parts of the corporate market carry less exposure to AI financing.

But if you look at countries, the safe countries are now the indebted countries.

Hendrik du Toit, Ninety One

Du Toit was more cautious on timing. Although emerging-market debt has outperformed, the nominal yield differential is not yet wide enough to create an avalanche of capital. Flows have been less pronounced in recent cycles because US investors have largely been rewarded for staying at home. Something has to give (likely in US credit markets) before a larger reallocation occurs.

The panel rejected the idea that passive management has permanently displaced active. Schlossberg observed that while ETF growth has been powerful, traditional mutual funds still hold the majority of assets. The next phase is the migration of active strategies into the ETF wrapper, followed in time by tokenisation. Koch highlighted an unintended consequence of passive success: some capitalisation-weighted growth indexes have become highly concentrated, with roughly 60 per cent of exposure in six companies. When one or two of those names stumble, the index itself can fall into the bottom quartile of performance. She noted that the large-cap growth benchmark is currently in the 88th percentile (bottom quartile) for the first time in her 46-year career.

Gregory Bond and Hendrik du Toit argued that fee compression has left active management better positioned to compete on after-fee alpha. Clients increasingly seek uncorrelated return streams. Du Toit stated that active management “is not in a great place today, but it’s probably in a great place tomorrow,” citing lower fees, more diverse return sources, and better use of data and AI.

Schlossberg framed AI as a means of improving investment quality and client service rather than a pure cost-cutting tool. Bond provided a granular view from Man Group. Large language models have become more widely adopted and more commoditised. The competitive advantage now lies in how firms embed the tools into idea generation, validation and execution. Validation remains the critical bottleneck, especially in mid-frequency strategies where historical data cannot be scaled indefinitely and human judgment stays essential.

Du Toit added that asset owners must themselves adapt. Any manager claiming to operate exactly as they did a decade ago is not credible.

Koch and Schlossberg closed on the shift from product provision to solutions. Understanding the client’s full mandate and working across public and private markets, and across asset classes, has become the minimum requirement. Diversification of capabilities inside the asset manager matters more than scale alone.

The discussion highlights several live questions for asset owners and private wealth portfolios: the limited medium-term market impact of US midterm outcomes, the relative fiscal strength of many emerging markets, the concentration risk now embedded in some passive indexes, and the growing importance of how managers actually deploy AI and deliver cross-asset solutions.