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During our recent rebalancing, we opted for a ‘roughly neutral’ equity stance in lower-risk profiles and a slight overweight in riskier ones instead of fully reinstating our previous overweight. This helped us benefit from the equity recovery in late April and early May. So, with equities appreciating, we are now slightly overweight. We are comfortable maintaining this overweight position, given the easing of trade tensions, including the recent US-China trade agreement to lower tariffs for an initial 90-day period.

The US recently introduced broad tariffs, triggering retaliation from China and the European Union. This escalation brings risks to growth and inflation. Uncertainty around tariff implementation, often driven by sudden announcements and reversals, has been more damaging to sentiment than the tariffs themselves. Still, with new rules in place, markets may start to recalibrate, especially when negotiations eventually begin. While this could change as things develop, exceptionally, we’ve decided not to adjust portfolios back to their long-term targets just yet. After the drop in equities and rise in government bonds, our current positioning is more cautious, with less overall risk. We’re not there yet, though lower valuations could eventually present selective entry points across equities and credit.

As we close the chapter on 2024, it's evident that our investment landscape is constantly changing. What lessons have we learned, and how can we better position ourselves for the opportunities and challenges of 2025?

US tariffs, market fundamentals and geopolitics have caused a change in leadership in 2025: European and UK equities are now outperforming their US counterparts due to improving corporate earnings relative to expectations, more attractive valuations and newly announced government spending including for defence and infrastructure.

The “Bundestagswahl” could result in a more growth-focused government led by a new Chancellor – but as it’s unclear how the next Berlin coalition will look like, hopes for meaningful, expansive adjustments could be disappointed.

As we turn the page on 2024, one thing is clear: the world we invest in continues to evolve. The past year defied expectations, surprising us with economic resilience even as markets braced for turbulence. So, what did we learn, and how can we better prepare for what 2025 might bring?

Alors que nous tournons la page sur 2024, une chose est claire : le monde dans lequel nous investissons continue d'évoluer. L'année écoulée a défié les attentes, nous surprenant par sa résilience économique alors même que les marchés se préparaient à des turbulences. Quelles leçons avons-nous tirées et comment pouvons-nous mieux nous préparer à ce que 2025 pourrait nous apporter ?

November is the time of the year when, together with the Investment Committee, I start preparing for our year-ahead market outlook. But, to tell you the truth, we do this continuously: as new research comes in and events unfold, we keep refining our market outlook, day in and day out.

As China’s latest economic stimulus package takes shape, one critical question arises: What does this mean for its net-zero ambitions?