Security-related investments are likely to provide opportunities for UHNW investors seeking to protect their assets in an increasingly fragmented world, according to J.P. Morgan Private Bank.
In the private bank’s 2026 Mid-Year Outlook, which advises investors on how to approach the second half of the year, defence, AI infrastructure and critical minerals were highlighted as assets that will help to diversify portfolios against a backdrop of geopolitical upheaval.
Countries are investing in their own security, said Grace Peters, co-head of global investment strategy at the bank, and investors should follow suit.
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‘At the start of 2026, we identified global fragmentation, inflation and artificial intelligence as the defining forces shaping the investment landscape, and the months since have only sharpened their relevance,’ she said.
Geopolitical conflict – for example the closure of the Strait of Hormuz, which created a significant strain on the global oil supply – is a long-term trend influencing market movements, the report emphasised, noting the fact that European defence stocks doubled in 2025, gold prices surged in February, and interest in equities linked to natural resources has grown.
European countries, such as Germany, are significantly increasing their defence spending, with others doubling or tripling it, according to the report. In line with this, investments in defence, whether that is through defence-focused ETFs or direct investments into companies, should be considered as part of UHNWs’ alternatives allocations, Peters said.
Long-term investments in infrastructure should also be considered to hedge against inflation, providing an average 8 to 12 per cent annual return, the report said. Stephen Parker, co-head of global investment strategy at J.P. Morgan Private Bank, noted that this asset class is vastly underinvested in.
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‘Nearly 80 per cent of family offices surveyed said they have no exposure to infrastructure, despite expressing concern about inflation,’ he said, citing data from the bank’s 2026 Global Family Office Report.
Fragmentation and rolling shocks should be considered a long-term reality for investors; according to J.P. Morgan Asset Management’s 2026 Long-Term Capital Market Assumptions report, which forecasts the years ahead for private investors, geopolitical tension will be a consideration for UHNWs over the next 10 to 15 years.
While the mid-year report focuses on current risks, Peters emphasised that UHNW investors should maintain a long-term approach.
‘Investors must walk a fine line – not overreacting to short-term headlines, but not ignoring long-term shifts either,’ she said. ‘We see compelling opportunities in emerging markets, security-driven investment and the national champions emerging on all sides of a bifurcating world.’
With regard to emerging markets, the report highlighted that Brazil has over 80 per cent of global reserves of niobium, a mineral that is integral to strengthening steel and is used throughout the aerospace and defence industries. Such rare earths, which refers to hard-to-produce minerals that are integral to global infrastructure, can be invested in via ETFs.
With the growing demand for AI in mind, investors should also consider investing in artificial intelligence infrastructure. The mid-year report pointed out that South Korea produces 75 per cent of the world’s digital memory technology, according to data from the Centre for Strategic and International Studies, and specialised ETFs focusing on the South Korean technology markets can provide a way in for investors.
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