Meanwhile, Antonucci has adjusted his European equity exposure to neutral, reflecting downside risks such as higher tariffs. “Brown Shipley is likewise tactically neutral on emerging market assets, including both equities and debt, due to similar apprehensions about China-US tensions as well as inflation and rate-hike concerns in Brazil,” Antonucci continued.

However, Indosuez remains positive on a selection of emerging market equities, especially in Asia. China’s real GDP growth stood at around 5 per cent in 2024, despite real estate problems affecting investment and consumption. Francis Tan at Indosuez views the recent strong policy efforts by China as stabilising, with positive implications for emerging markets and the Association of Southeast Asian Nations. “The shift in supply chains, spurred by US-China trade tensions, benefits ASEAN, which is also experiencing robust demographic growth, increased foreign direct investment, and market-friendly reforms. The prospect of a Chinese stimulus could also act as a regional catalyst,” Tan said.

Artificial intelligence
Indosuez believes that artificial intelligence and electrification are likely to participate in the much-needed boost in productivity growth in the coming years. AI is currently driving a bull market in US tech stocks. Despite high developing costs and increasing demand for energy, Nicolas Mougeot at Indosuez believes that AI could drive growth in the same way as previous technological revolutions did. Automation, task complementarity, new task creation and advancements in robotics are mostly being led by US tech.

Antonucci also highlighted the transformative potential of artificial intelligence as one of the trends to watch in 2025. Rather than focusing on narrow technology themes, Antonucci believes that the winners of tomorrow will likely be broader beneficiaries that deploy AI to gain a competitive edge. “Healthcare diagnostics, circular-economy supply chains that reuse resources and reduce waste, and infrastructure such as data centres and next-generation power grids are just a few examples of how long-term innovation will be driven by AI,” Antonucci said.

UBS Global Wealth Management also thinks that artificial intelligence will play out in 2025. AI and power and resources constitute two opportunities within equities with the potential to provide significant and sustained profit growth which could earn investors in these areas outsized long-term returns, UBS said. It sees the best opportunities in AI-linked semiconductors and US megacaps.

The second theme – electrification – impacts more than one sector. Fabrice de Sousa and Laura Corrieras at Indosuez label it a New Eldorado and believe it can shape the energy transition. By 2050, they said electricity output is expected to more than double and become greener, with 70 per cent from non-fossil sources, up from 11 per cent today. “The sectors that will likely benefit from investments include renewable energy, energy storage, grid transformation, and electric vehicles,” they added.

Fixed income
On fixed income, Antonucci noted that bonds – along with gold – can play a vital role in diversifying risks and, in some cases, appear attractively valued. “We are increasing our exposure to gilts, with a continued preference for short-dated ones, and to US Treasuries, while remaining underweight on the latter given fiscal concerns,” Antonucci said. “We are also reducing our exposure to European and US investment-grade corporate credit as we do not believe valuations adequately compensate for risks. Finally, with US fiscal policies potentially turning more inflationary, we are swapping shorter-dated US inflation-protected bonds for longer-dated ones.” 

On the currency front, despite an inflation-adjusted interest-rate differential pointing to a weaker greenback, Antonucci expects the US dollar to remain strong in the near term versus the euro and the pound sterling.