Diversification was the name of the game for investors in the first half of 2026, amid a backdrop of geopolitical tensions and renewed inflation concerns, according to Fidelity International.
Investor behaviour on Fidelity’s Personal Investing Platform during the first half of the year suggests personal investors remained focused on diversification, largely avoiding knee-jerk reactions.
Its analysis found investors moved out of cash and into global funds, emerging markets and gold early in the year, rebuilt cash positions during March’s volatility, then put money in technology, global equities and specialist growth themes in the second quarter.
The Fidelity Index World Fund was the best-selling fund during the first six months of the year, followed by Fidelity Cash Fund and Lazard Emerging Markets Fund.
Despite an uncertain backdrop, major equity markets proved resilient during the first half, with Japan and emerging markets among the stronger performers. While gold is often touted as a potential safe haven during periods of geopolitical uncertainty, Fidelity’s analysis showed it to be among the weaker performers.
Jemma Slingo, pensions and investment specialist at Fidelity International, commented: “In the first half of 2026, investors had to contend with geopolitical uncertainty, inflation concerns and debate around artificial intelligence, yet markets proved more resilient than many might have expected.
“What stands out from our platform data is that investors largely avoided knee-jerk reactions. Many continued building diversified portfolios. That reinforces two important points: short-term market reactions are difficult to predict, and in the absence of a crystal ball, a portfolio spread across a range of asset classes, markets and sectors remains the best defence against uncertainty.”
Fidelity said technology remained one of the defining themes of the first half of 2026, with Microsoft, Micron Technology and Polar Capital Global Technology all featuring among the most bought investments.
Slingo continued: “Perhaps the biggest shift during the first half was not that investors remained interested in artificial intelligence, but how that interest developed. Early in the year, attention naturally focused on the largest technology companies. As the months progressed, we saw growing demand for the businesses building the infrastructure that makes AI possible.”
Cash also remained an important portfolio tool over the course of the first half. While cash funds dropped out of the top rankings in January for the first time in more than two years, by March they had returned strongly as investors responded to increased market volatility. Fidelity Cash Fund and Royal London Short-Term Money Market Fund both ranked among the most bought funds in the first half of the year.
Meanwhile, UK-listed shares also featured consistently among the most bought investments. Legal & General Group ranked as the second most bought share, while Taylor Wimpey, RELX, Croda International, Diageo, Aviva, Primary Health Properties and NatWest Group all appeared in the rankings.
Slingo added: “The UK has been out of favour for a long time, but that is part of what makes it interesting. Investors looking to diversify away from a highly valued US market have continued to find opportunities in UK income, financials, housebuilders and real assets.
“As market leadership broadens beyond a narrow group of growth and technology stocks, the UK’s tilt towards value, dividends and hard assets could become more attractive.”
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