Geneva-headquartered global wealth and asset manager Lombard Odier has just published its latest investment and economic outlook for 2025, assessing asset classes globally.

US-led solid growth, the global monetary easing cycle, and a strong corporate earnings growth outlook still provide for a positive equity environment in 2025, according to Swiss private bank Lombard Odier.

The firm highlighted how the US economy continues to expand, while tariff risks loom for Europe and emerging countries. Lombard Odier expects Japan’s rebound to continue, while China’s improvement may be short-lived barring greater economic stimulus.

“Though the announcement by China’s artificial intelligence (AI) firm DeepSeek triggered substantial volatility in US information technology, other S&P 500 sectors withstood it well, taking the index to new highs,” the bank said in a note. Therefore, it keeps its portfolio exposure to riskier assets – notably equities – above strategic levels.

In terms of investment implications, Edmund Ng, senior equity strategist, and Patrick Kellenberger, emerging market equity strategist at Lombard Odier, think there will be winners and losers within the technology sector, and retain a neutral view on the tech sector.

“As the European market is also heavily exposed to the AI theme through industrials and semiconductors, the DeepSeek development does not change our preference for US over European equities. Our equity overweight reflects a preference for US and Japanese markets. We expect the recent underperformance to subside,” Ng and Kellenberger said.

Emerging market equities
Ng and Kellenberger highlighted how emerging market equities continue to underperform, and therefore stay neutral here versus developed markets. They also remain neutral on China and India. “Despite some improvements, China is still grappling with a struggling property market and weak consumer sentiment, while India is experiencing a mid-cycle slowdown,” Ng and Kellenberger continued. While they see scope for further downgrades in South Korea, they believe that earnings should hold up more than low valuations suggest. An increase in valuations appears likely as revisions fade. Supported by Korea’s dominance of high bandwidth-memory semiconductors, which are crucial for AI and data centres, earnings growth should stay solid. Ng and Kellenberger continue to favour Taiwan and South Korea for their robust earnings growth.

Fixed income
Lombard Odier’s fixed income allocations remain at strategic levels, with overweight exposures to investment-grade and high-yield bonds, and underweights to government bonds. While Luca Bindelli, head of investment strategy at Lombard Odier, expects bond yields to decline over the year, he expects some volatility in longer-dated yields to persist near term, led by US policy uncertainty and implications for sovereign bond yields. This is why he prefers to hold higher-quality corporate bonds with similar maturities in portfolios for now.

Within government bonds, Bindelli sees the best prospects in German bunds and UK gilts. He also retains his overweight high-yield bond exposure, with shorter maturities still preferred. Lombard Odier keeps a neutral stance on emerging market bonds, favouring corporate issuers.

Bindelli’s overweight in gold also remains in place, helping to diversify away from inflation risk and public deficit concerns, despite recent higher yields and a stronger dollar. “The dollar should strengthen further against both developed and emerging market currencies, driven by interest rate differentials and new US trade policies,” he said. He thinks the euro and sterling are most at risk of depreciating against the dollar. Lombard Odier has also increased its hedge fund allocation in its strategic asset allocations for greater portfolio resilience.