Jasper Thornton-Boelman

2025 has marked a rotation in both flows and performance for equities. The US, having led the way on both for an extended period of time, has meaningfully lagged YTD. All very short term at this point, but the mood music does feel as though it's changing. Diversification has been a hindrance to asset allocators for some time but if this trend continues, and returns continue to broaden out, staying clear of a market cap approach may well be the smart play.

We maintain an overweight to US small cap - at the expense of large cap – viewing them as a beneficiary of the Trump administration once policy focus turns more domestic. Alternatives exposure has also been increased, a hedge to the growing risk of elevated inflation combined with a continued slowdown in economic growth.

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