M&S, Nvidia among Hargreaves Lansdown's 'shares to watch for 2026'

(Sharecast News) - Hargreaves Lansdown said on Monday that Marks & Spencer, Novo Nordisk and Nvidia were among its shares to watch in 2026, while Alliance Witan and Personal Assets Trust were among its investments trusts to watch next year.

Derren Nathan, head of equity research, said 2025 has been a year of two halves for equity investors.

"Overall, markets have held up well, but heading into 2026, global tensions and a mixed economic outlook mean there could be sharper share price swings next year," he said. "The good news? Uncertain times can suit longterm investors. Trying to call every shortterm turn rarely works. A better plan is to spread money across regions, sectors and asset types, rather than relying on one theme or one market."

For investors looking to diversify and strengthen their portfolios for the years ahead, he highlighted three of HL's five shares to watch for next year and beyond, "each with a unique thematic investment case".

Nathan said food, clothing and homeware retailer M&S goes into 2026 looking to rebuild after a tough year.

"A cyberattack hit online sales, mainly in Fashion, Home & Beauty, but bosses expect systems to be back to normal by spring," he noted. "The Food division keeps winning customers, and if spending on digital and margins pays off, profits could bounce back."

Nathan said Danish pharmaceutical firm Novo Nordisk had a rough 2025 as supply was tight, rivals pushed harder, and pricing came under pressure in diabetes and obesity care.

"Even so, demand is still huge," he said. "More factory capacity, stronger action against illegal copy drugs and the recent approval of its oral weightloss pill could lift confidence."

Shares in Novo Nordisk surged last Tuesday after the US Food and Drug Administration approved the pill form of its Wegovy weight loss drug. The Wegovy pill - the first oral glucagon-like peptide-1 (GLP-1) receptor agonist therapy approved for weight management - is expected to be launched in the US in early January.

Finally, Nathan said US tech giant Nvidia remains a key name in the AI buildout. "Competition is rising, and some big buyers want more than one supplier, but the firm's fast pace of new chips and strong position in advanced computing keep it central to big tech spending."

As far as investment trusts are concerned, Hal Cook, senior investment analyst at Hargreaves Lansdown, said there was lots for investors to contend with as we move into 2026.

"In an uncertain environment, we think it makes sense for investors to diversify across asset classes, regions, sectors and styles to reduce the risk that any one event blows your whole portfolio off course," he said.

He highlighted Alliance Witan, JPM Emerging Markets Growth & Income and Personal Assets as three investment trusts that could be useful additions to an investment portfolio to add some diversification.

Cook pointed out that Alliance Witan aims to grow an investment and provide a rising income over the long term by investing in companies from around the globe.

"The trust adopts a multi-manager approach, which means portions of the trust are run by different fund managers which means there's plenty of diversification on offer," he said. "The trust's Investment Committee believes that the majority of stock pickers outperform with their highest conviction investments but hold back returns with their smaller holdings. That's why they only let most of their underlying managers invest in their 20 best ideas.

"They have 11 different managers whom the Investment Committee blend together in the trust, ensuring there isn't too much risk at a company, sector, or geographical level as well as a portfolio balance in terms of investment style."

He also noted that it is an Association of Investment Companies "dividend hero", having increased its dividend for 58 years in a row.

"In an environment where we think it will pay to be diversified, we think the trust could be an interesting option. The trust could be used for income or to bring international diversification to a more UK focused portfolio," he said.

Cook said the JPM Emerging Markets Growth & Income trust aims to achieve long term growth in capital and income by investing in high quality businesses capable of delivering long-term growth.

"The trust is managed by emerging markets veterans, Austin Forey and John Citron," he said. "They benefit from a well-resourced team of over 100 investment professionals across nine countries, giving them eyes in most corners of the market. We think this is invaluable given the vast range of countries, cultures, and companies within their investable universe."

Finally, he said that in an environment where there are a lot of potential risks to consider, investing in something that actively tries to keep losses to a minimum can provide some ballast to an investment portfolio. "Personal Assets Trust is a great example of this type of investment trust," Cook said.

"It aims to grow investors' money steadily over the long run, while limiting losses when markets fall. We like the simple philosophy behind this trust, with the potential for long-term growth and a focus on preserving wealth in weaker markets."