Matthew Hinman

As we enter Q2 we foresee that peak tariffs will occur in this quarter, as a consequence we look to reduce our overweight on inflation-linked bonds. We believe nominals will offer a better return as we see inflation subsiding into the latter half of 2025. We persist with our overweight on Asia and added to China specifically during Q1, in response to the "Deep Seek" moment that brought attention back to Chinese tech and its undervalued equities in general.

US markets are likely to continue retreating from elevated valuations, coupled with downward revisions to earnings forecasts, we see further potential for declines. In fixed income, we continue to favour sovereign bonds. Early signs of widening credit spreads have emerged, and our primary scenario anticipates this trend persisting, justifying our minimal allocation to credit.

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