What’s driving fund managers’ optimism for the next decade

Earlier this week, we hosted one of our popular speed-dating events – though, as usual, romance wasn’t on the agenda. Instead, nine financial journalists were each given just ten minutes to interview five Elite Rated fund managers and uncover the latest market insights.

While the journalists focused on getting their stories, we took the opportunity to ask some questions of our own. We wanted to know where these managers see the biggest long-term opportunities – and what trends they believe will shape markets over the next five to ten years. From undervalued UK mid-caps to the unstoppable rise of artificial intelligence, their views paint a fascinating picture of what could drive returns in the decade ahead.

Rediscovering value at home

After a challenging few years, Alan Dobbie, co-manager of Rathbone Income, believes the tide is turning for UK mid-caps. Once a neglected area of the market, these companies now look attractively valued compared with their large-cap peers, a rare situation that could signal opportunity ahead.

He explained that mid-caps “very rarely trade at a discount to large caps and when they do, you see lots of opportunities.” That valuation gap, he added, is already beginning to narrow, suggesting that returns could be driven by both income and capital growth over the next decade. 

Alan has acted on this conviction, increasing the fund’s exposure to mid-caps from 14% in 2021 to 24% today. Much of this has come from recycling profits into mid-cap REITs and industrials. “The UK market is proving to be a bit of a port in the storm,” he said, noting that investors are slowly recognising the value on offer closer to home.

Simon Murphy, manager of the VT Tyndall Unconstrained UK Income fund explains, why he believes the UK economy is far more resilient than many assume on the Investing on the go podcast.

A similar theme of undervaluation is playing out in UK property, according to Matt Norris, manager of TM Gravis UK Listed Property. He believes the sector offers a compelling mix of yield, growth and recovery potential. And that private equity could be the catalyst for revaluation.

“The UK REIT sector is super cheap right now,” he said, pointing to recent deals that have lifted sentiment. “Private equity is buying, you don’t have to wait five or ten years for a re-rating; it’s happening already.”

The fund’s strategy focuses on long-term structural trends such as ageing populations, digitalisation and urbanisation. By targeting the best-quality real estate in the right locations, he aims to benefit as institutional investors and private equity capital flow back into the market. “We focus on quality,” he said, “and let the megatrends do their work.”

Innovation at the heart of growth

In Asia, technology remains a powerful driver of growth, but it’s not the only story. Jason Pidcock, manager of Jupiter Asian Income, believes the region’s world-class tech sector, combined with rising domestic consumption, creates a resilient long-term opportunity. “Asia does tech particularly well,” he said, highlighting markets such as Taiwan, South Korea and India as global leaders. “The sector remains a great long-term investment.”

This fund also taps into companies benefiting from growing local demand in markets like Singapore and Australia. His highly concentrated portfolio — just 25 stocks across five markets — reflects his conviction-based approach. “We don’t want to put all our eggs in one basket,” he explained, “but tech remains our single biggest sector.”

If technology defines Asia’s opportunity, artificial intelligence could define the world’s. Matt Ward, co-manager on AXA Framlington Global Technology, believes we are only at the beginning of AI’s impact and that it will become the most transformative force of the coming decade. But what excites him most is AI’s personal, adaptive nature. “It’s a general-purpose technology that’s becoming deeply personal. The next decade will be about AI learning context, solving individual problems, and spreading into every sector from healthcare to materials science.”

He argues that innovation is the heartbeat of long-term growth and AI is simply its newest expression. “Unless you don’t believe it works,” he said, “ignoring AI means risking your returns.”

Going beyond equities

Anthony Kettle, manager of the BlueBay Emerging Markets Unconstrained Bond fund, sees long-term opportunity in a part of the market many investors overlook: emerging market currencies. After years of US dollar dominance, he believes the cycle is finally turning. “We’ve been through a long period of dollar strength,” he explained. “Now the opportunity is in emerging market currencies that look cheap and could benefit as the dollar weakens.”

He also points to the potential in frontier economies, where high yields can offer returns that rival equities. “If you can get it right in some of these markets, the returns can be 15% to 20%,” he said. For Anthony, emerging market debt isn’t about taking on more risk, it’s about finding disciplined economies where diversification and strong fundamentals can drive long-term returns.

Read more: When emerging markets look safer than the US

The ultimate opportunity

Across markets and sectors, one theme runs through all five perspectives: change creates opportunity. Whether it’s the revaluation of UK mid-caps, the influence of private equity on property, the recovery of emerging market currencies, Asia’s enduring innovation, or the unstoppable advance of AI, each story reflects a longer-term shift already underway. For investors willing to look beyond short-term noise, the next decade could be full of possibilities.