Chris Metcalfe

As we enter Q2 2025, we expect markets to remain challenging amid ongoing geopolitical tensions, evolving trade uncertainties, and shifting investor sentiment. We anticipate further divergence between US and international equities, reinforcing the necessity of diversification. After a sustained period where investors have been paid for concentration in the US and growth style companies, US equities are likely to encounter continued headwinds - driven by persistent trade tensions and the chaos surrounding tariff policies.

Additionally, volatility in technology sectors, particularly the "Mag 7" stocks, may persist amid evolving dynamics within the AI industry, notably influenced by DeepSeek's emergence and fading optimism that AI will deliver the huge rapid improvements to company's bottom lines. International equities, however, present promising opportunities, with regions such as Europe and China expected to maintain resilience and still offer attractive valuations.

Certain markets, including India, may remain under pressure due to global trade tension, but the relative attractiveness of some Indian stocks has markedly improved. Fixed income assets should continue providing stability and potential modest gains, underscoring their essential role as portfolio diversifiers. If everything bases off the 10-year treasury, then a starting yield of circa 4.3% offers plenty of opportunities, especially for the active managers in this space Our portfolios remain strategically diversified, positioned cautiously yet optimistically to capture opportunities across the globe during anticipated market volatility.

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