Quarterly Positioning

March 2025 

The beginning of 2025 has been marked by market volatility, driven by expectations of smaller benchmark rate cuts and the economic impact of the trade war under President Trump’s new administration. 

We share a summary of the key movements: 

Market performance 

In the U.S., the S&P 500 and Nasdaq are down 4% and 9% year-to-date (YTD), respectively, affected by monetary and tariff uncertainty. In contrast, the Euro Stoxx 50 has risen 12% amid the potential for a peace agreement in Europe, while China has rebounded by 24% due to stimulus measures and improved outlooks. 

Monetary policy and valuation 

In terms of monetary policy, U.S. inflation remains above the Fed’s target, prompting the market to adjust expectations, with between one and two 25 basis point (bps) rate cuts anticipated in 2025. Additionally, the S&P 500 valuation remains high, with a forward P/E of approximately 20.7x. 

Strategy and positioning 

We maintain our positive tactical stance on large-cap equities, although we anticipate episodes of volatility due to market sensitivity to tariffs and high valuations. 

Key events to watch: 

• Tariff policies under Donald Trump’s new administration. 
• Inflation trends and potential benchmark rate cuts ahead. 

Discover our annual report ‘2025 Perspectives’ and the key insights for the upcoming year.

The final stretch of 2024 continues to reflect an outstanding performance in the markets, maintaining the positive trend that has prevailed throughout most of the year. This growth has been driven by several key factors that have strengthened global stability:

• Disappearance of political uncertainty: The resounding victory of Donald Trump and the Republican wave in both chambers have paved the way for a more predictable political environment.
• Interest rate reductions: The Federal Reserve has initiated a cycle of benchmark rate cuts, creating a favorable environment for investments.
• Strong earnings performance: Corporate financial results have exceeded expectations, generating a positive balance for the year.

Looking ahead to 2025, the new political agenda is expected to focus on potential tax cuts, reduced regulation, and policies to stimulate the domestic economy. However, the implementation of these measures could present challenges, such as:

• Trade tensions.
• A higher public deficit.
• Rising inflation and higher interest rates.

These factors may pose a challenge for the Federal Reserve, particularly in a context where inflation has slowed to levels more comfortable for the institution.

In this highly dynamic environment, we are pleased to present our annual report, ‘2025 Outlook’. In it, you will find:

• The perspective of our Investment Committee on this economic scenario.
• Expectations for each asset class and region.

We are confident this report will provide valuable insights into the next steps to take and how to optimize your investment strategies.

To access the full report, click on the next button or contact us for more details.