United StatesA year ago, we wrote that “irrespective of any policy disruptions that could arise as a result of upcoming elections in 2024… the transition towards a more sustainable economy has strong momentum”. We believe that 2025 will prove our thesis to be correct.
Irreversible transformations are well underway in the real economy, across a breadth of sectors. Technology is the prime catalyst. These economic disruptions create opportunities for innovative companies and their investors, but are often poorly understood by the wider market. It is our conviction that investors focused on these transformations can target better risk-adjusted returns as the transition to a more sustainable economy accelerates.
Many factors are aligning to provide a constructive climate for selective investors in 2025.
Following a period of exceptional stockmarket concentration, any combination of a robust US economy, lower terminal interest rates and a change in sentiment could spur a rebalancing away from mega-cap technology stocks and towards overlooked stocks. Whenever a market correction happens, we believe companies with strong operational profiles and compelling valuations will be well-positioned.
Strong corporate fundamentals and prospects of a ‘soft economic landing’ in the US meanwhile provide a positive backdrop overall for credit investors.
In this paper, we share our global equities outlook from the Listed Equities team and, for the first time, a credit market outlook from the Fixed Income team, as well as perspectives from our Private Markets team.