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Δ Overweight     ∇ Underweight    — Neutral

Equity – at a glance     Δ

28 MARCH 2025

• We trim the scale of our Overweight on global equities due to policy uncertainty under the Trump administration.
  
• We downgrade US equities to core holding (Neutral). Valuations have become more attractive after the pullback, and EPS growth continues to lead other regions. However, tariff risks are resulting in prolonged volatility.
  
• We upgrade Europe ex-UK equities to core holding (Neutral), supported by fiscal stimulus plans and earnings recovery. However, geopolitical risks and structural challenges could limit outperformance. UK equities remain a core holding (Neutral) as the defensive exposure and an attractive dividend yield will support amid a volatile market, while stickier inflation could hold back the potential upside.
  
• Asia ex-Japan equities are a core holding (Neutral). Within the region, we upgrade China equities to Overweight. We are positive about the technology-related developments and China’s stimulus measures, which likely outweigh the trade uncertainties and structural worries. Meanwhile, we downgrade India equities to core holding (Neutral). We believe in India’s long-term growth prospects, although the equity market has suffered from fund rotation into cheaper Chinese equities. Japan equities are also a core holding (Neutral). Earnings pressure from a stronger JPY and persistent foreign capital outflows could weigh on the market.
  

North America equities – Preferred holding     ∇

28 MARCH 2025

The Bullish Case:

+ Tailwind from a soft-landing scenario

+ Stimulus from deregulation and tax cuts

+ Loosening Fed policies

The Bearish Case:

– Deterioration in earnings and economy

– Fears of resurgent inflation

– Expensive valuations. Elevated positioning

Europe ex-UK equities – Less Preferred holding     Δ

28 MARCH 2025

The Bullish Case:

+ Earnings revisions improving

+ Fiscal stimulus plans

+ Still attractive valuations

The Bearish Case:

– Increasing geopolitical tensions, US tariffs

– Cyclical and structural headwinds

– Slump in economic sentiment

UK equities – Core holding     —

28 MARCH 2025

The Bullish Case:

+ High dividend yield; cheap valuations

+ Relatively defensive sectors

+ Relatively unaffected by Trump 2.0

The Bearish Case:

– Restrictive monetary policies

– Cooling consumer confidence

– Low exposure to growth sectors

Japan Equities – Core holding    —

28 MARCH 2025

The Bullish Case:

+ Corporate governance reforms

+ Further improvement in earnings outlook

+ Secular reflation

The Bearish Case:

– Political, global trade uncertainty

– Rebound in JPY to hurt company earnings

– Persistent foreign capital outflows

Asia ex-Japan equities – Core holding     —

28 MARCH 2025

The Bullish Case:

+ China’s fiscal and monetary stimulus

+ Recovering return on equity

+ Attractive valuations; Low positioning

The Bearish Case:

– Structural issues e.g., deflation in China

– Additional US and Europe tariffs

– Chip restrictions hurting Taiwan and Korea

Δ Overweight     ∇ Underweight    — Neutral

Bonds – at a glance     —

28 MARCH 2025

• We view global bonds as a core holding. Tight yield premia but high absolute yield levels led us to maintain a Neutral stance on global bonds. We continue to expect policy rate cuts from major Western central banks, despite volatility in long-term rates. We view a Neutral bond maturity profile (five- to seven-year average) as the best balance between repricing risks and yield potential.
  
• Our constructive view on growth means a preference for corporate over government bonds. We are Overweight DM High Yield (HY) and Neutral (core holding) on DM Investment Grade (IG) corporate bonds. DM HY still offers attractive nominal and real yields from a risk-adjusted returns angle while DM IG’s high valuations are supported by solid fundamentals and continued inflows. We have downgraded DM IG government bonds to Underweight on interest rate volatility concerns. DM IG government bonds are also weaker than DM IG corporate bonds from an income generation perspective.
  
• EM USD government and Asia USD bonds are core holdings. While yields are appealing, US protectionism poses risks. In Asia, we prefer HY over IG bonds due to domestic exposure and China stimulus. We upgrade EM local currency government bonds to Neutral, given our view of a relatively rangebound USD long-term and steady fund flows into the asset class.
  

Developed Market Investment Grade government bonds – Core holding     ∇

28 MARCH 2025

The Bullish Case:

+ Attractive yield by historical standards

+ DM monetary policies are mildly dovish

The Bearish Case:

– A shorter-than-expected rate cutting cycle

– Policy uncertainties create volatility

Developed Market Investment Grade corporate bonds – Core holding     —

28 MARCH 2025

The Bullish Case:

+ Attractive yield by historical standards

+ Attractive relative value against benchmark government bonds

The Bearish Case:

– Relatively tight yield premium

– Deterioration of fundamentals could reduce relative attractiveness

Developed Market High Yield corporate bonds – Preferred holding     Δ

28 MARCH 2025

+ Easing refinancing pressure

+ Attractive yield by historical standards

+ Deregulatory policies to support earnings

The Bearish Case:

– Higher default or restructuring risks

– Deterioration of fundamentals could reduce relative attractiveness

Emerging Market USD government bonds – Core holding     —

28 MARCH 2025

The Bullish Case:

+ Supportive commodity prices

+ Bullish investor positioning as major bond restructurings are behind us

The Bearish Case:

– A shorter-than-expected rate cutting cycle

– Policy uncertainties create volatility

Emerging Market Local currency government bonds – Less Preferred holding     —

28 MARCH 2025

+ EM fiscal strength built up in recent years offer buffer against FX vulnerabilities

+ Higher overall yield under a stable DXY

The Bearish Case:

– Unfavourable yield differentials with DM

– Geopolitical and global trade uncertainties

Asia USD bonds – Core holding    —

28 MARCH 2025

The Bullish Case:

+ Regional growth remains resilient

+ Bullish investor positioning and supportive technicals

The Bearish Case:

– Softer China economic growth outlook

– Higher default or restructuring risks

Δ Overweight     ∇ Underweight    — Neutral

Commodities – at a glance

28 MARCH 2025

• We remain Overweight on gold, raising our 3-month price target to USD 3,000/oz and 6-12-month price target to USD 3,200/oz. Gold has surged YTD, posting gains in all but one week and reaching a record high of USD 3,048/oz. Following this sharp rally, we believe gold is poised for a pullback, with prices now four standard deviations above the 200-day moving average, a level that has historically signalled a near-term top in prices. However, any pullback is expected to be modest amid continued US tariff uncertainty. We would use any weakness to add exposure, as structural drivers, such as Emerging Market (EM) central bank gold purchases, remain intact. Meanwhile, we are looking for signs that softer US consumer confidence translates into a higher savings rate, which would fuel further gains in global gold ETF holdings (Fig. 33). The long-term depreciation of gold relative to the S&P500 appears to have also bottomed, an encouraging sign that gold may be in the early stages of a multi-year rally.
  
• WTI oil prices are likely to stay subdued around USD 65/bbl over 3m and 12m horizons. Strong supply amid still-tepid demand, which leaves global oil markets in a surplus through 2025, remains the key rationale behind our view. On the demand side, a small uptick in Chinese oil demand growth offers a glimmer of optimism, but it is unlikely to trigger a significant shift in the global demand-supply balance without a sharp improvement in domestic growth. On the supply side, OPEC+’s decision to continue unwinding some of its prior supply cuts is likely to exacerbate excess supply. The main risks to our view stem from geopolitics – a tightening of sanctions on Russia and tighter enforcement of sanctions on Iran or a wider escalation pose upside risks to our oil price view. However, significant OPEC+ spare capacity means any price bounds are likely to be short-lived.
  

Oil

21 FEBRUARY 2025

The Bullish Case:

+ Strong supply pipeline

+ Neutral level of investor positioning

The Bearish Case:

– Pace og global growth

Gold      Δ

28 MARCH 2025

The Bullish Case:

+ Portfolio hedge

+ Central bank demand

+ falling real yields

The Bearish Case:

– Resilient USD

Δ Overweight     ∇ Underweight    — Neutral

Alternatives – at a glance     

21 FEBRUARY 2025

The Bullish Case:

+ Diversifier characteristics

The Bearish Case:

– Equity, corporate bond volatility

Δ Overweight     ∇ Underweight    — Neutral

Multi-Asset – at a glance

21 FEBRUARY 2025

• Our Multi-asset income (MAI) strategy has delivered 7.8% returns year-to-date, supported by our core allocations to the US, Europe and Asia dividend equities, and covered calls, given the strong returns from equity markets. Elsewhere, fixed income components generally added positively to the strategy returns, with Developed Market (DM) High Yield (HY) and Emerging Market (EM) hard currency bonds being the stronger contributors. EM local currency bonds had a more challenging 2024 due to USD strength. Looking ahead, we continue with our tilt towards sub-financials over DM HY bonds, while we prefer taking risk through global dividend equities rather than covered calls. We have also adjusted our MAI strategic allocations – increasing allocations in fixed income and introducing global equities into the mix.
  
• Yields on offer across income assets are likely to fall slightly in 2025 as central banks continue to cut rates. To preserve income streams and maintain returns in a falling rates environment, investors can consider reallocating into assets with higher yields, mitigating reinvestment risks. A diversified MAI strategy offers a comprehensive approach to maintain high income and returns in a falling rates environment.
  
• Although income strategies prioritise generating a steady cash flow, it is important to adopt a total returns approach. Reinvesting dividends and interest rather than withdrawing them can significantly enhance long-term returns by combining income with capital appreciation. This holistic view is critical for sustaining wealth over time.