Now’s the time to plan your legacy

Δ Overweight ∇ Underweight — Neutral

Equity – at a glance    Δ

23 MAY 2025

• We upgrade Global and US equities to Overweight as trade tensions de-escalate and there is further room for investor positioning to normalise.
  
• We plan to increase exposure to US equities on near-term pullback, especially on growth-focused US equities, while rotating out of defensively tilted UK equities.
  
• We expect China equities to outperform Asia ex-Japan, with attractive valuation and growth prospects from DeepSeek.
  

North America equities – Preferred holding     Δ

23 MAY 2025

The Bullish Case:

+ Earnings growth

+ Al uptrend

The Bearish Case:

– Valuations

– US trade policy uncertainty

Europe ex-UK equities – Core holding     —

23 MAY 2025

The Bullish Case:

+ Inexpensive valuations

+ German fiscal spending

The Bearish Case:

– US trade policy risks

UK equities – Less Preferred holding     ∇

23 MAY 2025

The Bullish Case:

+ Attractive valuations

+ dividend yield

The Bearish Case:

– Stagflation risks

– US trade policy risks

Japan Equities – Core holding     —

23 MAY 2025

The Bullish Case:

+ Reasonable valuations

+ rising dividends/share buybacks

The Bearish Case:

– JPY strength

– US trade policy

Asia ex-Japan equities – Core holding     —

23 MAY 2025

The Bullish Case:

+ Earnings

+ India growth

+ China policy support

The Bearish Case:

– China growth concerns

– US trade policy

Δ Overweight     ∇ Underweight    — Neutral

Bonds – at a glance     —

23 MAY 2025

• Foundation: We downgrade DM government bonds to a core holding but still believe current yield levels offer an attractive entry point. Worries about inflation and the US fiscal deficit have pushed yields higher, but we expect yields to eventually fall in both soft and hard landing scenarios. An unexpected surge in inflation expectations due to tariffs is the key risk.
  
• New opportunistic view: Turn bullish US 20-year-plus US government bonds. We believe the recent rise in 20-year+ US bond yields to the upper end of their recent trading range makes them attractive. A surge in inflation expectations is a risk.
  
• New opportunistic view: Turn bullish UK government bonds [Gilts] (FX-unhedged). We like the nominal yield pick-up over other Developed Market (DM) government bonds and believe the Bank of England is in a better position to cut rates relative to peers. Risks include stronger-than-expected inflation, wage growth and significant GBP weakness.
  
• Outstanding opportunistic views: Bullish US Agency MBS; bullish US Treasury Inflation-Protected Securities.
  

Developed Market Investment Grade government bonds – Less Preferred holding     —

23 MAY 2025

The Bullish Case:

+ High credit quality

+ Attractive yields

The Bearish Case:

– High sensitivity to inflation

– Monetary policy

Developed Market Investment Grade corporate bonds – Core holding     —

23 MAY 2025

The Bullish Case:

+ High credit quality

+ sensitive to falling yields

The Bearish Case:

– Elevated valuations

Developed Market High Yield corporate bonds – Preferred holding     —

23 MAY 2025

+ Attractive yield

+ Low rate sensitivity

The Bearish Case:

– Elevated valuations

– Sensitive to growth

Emerging Market USD government bonds – Core holding     —

23 MAY 2025

The Bullish Case:

+ Attractive yield

+ Sensitive to US rates

The Bearish Case:

– EM credit quality

– US trade policy risks

Emerging Market Local currency government bonds – Core holding     —

23 MAY 2025

+ Attractive yield

+ Benefit from USD weakness

The Bearish Case:

– US trade policy risks

Asia USD bonds – Core holding    —

23 MAY 2025

The Bullish Case:

+ Moderate yield

+ Low volatility

The Bearish Case:

– Sensitive to China growth

Δ Overweight     ∇ Underweight    — Neutral

Commodities – at a glance

23 MAY 2025

• We downgrade Gold to a core holding and expect a period of consolidation ahead. We trim our 3-month price expectation to USD 3,100 and leave our 12-month expectation unchanged at USD 3,500.
  
• Our 12-month oil price forecast remains unchanged at USD 60/bbl amid still-significant supply. However, over a shorter1-3-month horizon, we expect prices to rebound towards USD 64/bbl.
  

Oil

28 March 2025

The Bullish Case:

+ Strong supply pipeline

+ Neutral level of investor positioning

The Bearish Case:

– Pace og global growth

Gold      —

23 MAY 2025

The Bullish Case:

+ Portfolio hedge

+ Central bank demand

+ Falling real yields

The Bearish Case:

– Resilient USD

Δ Overweight     ∇ Underweight    — Neutral

Alternatives – at a glance     —

23 MAY 2025

The Bullish Case:

+ Diversifier characteristics

The Bearish Case:

– Equity, corporate bond volatility

Δ Overweight     ∇ Underweight    — Neutral

Multi-Asset – at a glance

23 MAY 2025