Our multi-asset investment views - March 2025
We remain positive on equities and have broadened our regional exposure, upgrading our views on global emerging markets and China. Find out more about our views on a range of asset classes here.
Authors
🟢 Long / positive
🟡 Neutral
🔴 Short / negative
🔼 Up from last month
🔽 Down from last month
Main Asset Classes
🟢 Equities
We remain positive, believing that concerns about a US recession are premature due to the robust labour market. However, we have broadened our regional exposures given varying valuation levels among global equity markets.
🟡 Government bonds
We remain neutral. Following the recent market correction and yield rally, our valuation models indicate US bonds are fairly valued.
🟡 Commodities
While we are positive on industrial metals and gold, excess supply is likely to continue to drag down energy markets, leaving us neutral overall.
🟡🔽 Corporate bonds (credit)
We have downgraded our score to neutral due to tight valuations, particularly in US investment grade (IG), and policy uncertainty that has led to conservative behaviour from corporations.
Equities
🟢 US
Although we remain positive on US equities, we have tempered our view slightly. While the labour market remains solid, inflation risks are likely to persist due to uncertainty over trade tariffs.
🟡 UK
We remain neutral as recent Bank of England forecasts suggest growth weakness and persistent inflation, indicating a cautious approach to monetary policy.
🟢 Europe ex UK
We remain positive. Despite the strong rally in recent months, valuations are not yet stretched.
🟡 Japan
We remain neutral on Japanese equities, recognising global uncertainties and the lack of strong domestic catalysts to drive the market.
🟢🔼 Global Emerging Markets1
We have upgraded our view to positive. A weaker US dollar and a better outlook for China should boost confidence in the EM market.
🟢🔼 Asia ex-Japan: China
Upgraded to positive, given that the Chinese government has confirmed a shift towards technology innovation and consumption which should improve market sentiment.
🟡 EM Asia ex China
We remain neutral due to downside risks in markets such as South Korea, where concerns include a slowing economy, domestic political risk, and tariff risks.
1Global Emerging Markets includes Central and Eastern Europe, Latin America, and Asia.
Government bonds
🟡 US
We remain neutral. Following the recent market correction and the rise in bond yields, our valuation models indicate that US bonds are fairly valued.
🟡 UK
We remain neutral as although gilts have not been unduly affected by the recent European bond market sell-off, inflation remains sticky.
🟡 Europe
We remain neutral as although inflation data has broadly improved, there has been a clear signal from Germany and eurozone countries to spend more on defence.
🟡 Japan
Recent economic data has been stronger than expected, which has raised concerns about inflation and future interest rates, leading us to remain neutral.
🟡 US inflation-linked bonds
We remain neutral as we believe oil prices will remain subdued given the backdrop of ongoing tariff uncertainty, which may keep expectations of higher prices pushed out for a while longer.
🟢🔼 Emerging markets local currency bonds
We have upgraded to positive as the asset class provides some diversification from Trump or tariff-related noise. Current yields appear attractive relative to developed market bonds.
Investment grade credit
🔴 US
We remain negative, as US IG remains expensive and is more vulnerable to interest rate volatility.
🟡 Europe
We remain neutral as although a valuation premium still exists versus the US, valuations and spreads (the difference between the yields of two different bonds) have nonetheless tightened.
🟡 Emerging markets USD
We remain neutral as although the sector offers greater value compared to developed markets, there appears to be no clear catalyst to boost the asset class.
High yield bonds (non-investment grade)
🟡 US
We remain neutral on US HY given the tightness of spreads. However, fundamentals and technicals remain benign.
🟡🔽 Europe
We have downgraded to neutral as there has been an extreme divergence between European and US credit performance.
Commodities
🔴Energy
We expect further downside for oil markets with OPEC+ supply returning. Meanwhile, US natural gas prices are likely to drop as the country transitions out of a cold period.
🟢 Gold
We remain positive as central banks, crucially the People's Bank of China, continue to buy. Investor demand is returning and interest rate levels are turning more supportive.
🟢🔼Industrial metals
There has been structural underinvestment in this sector, which has constrained supply. Given an upswing in the global manufacturing cycle, this should be supportive.
🟡 Agriculture
With fundamentals still in balance, the market is likely to be more influenced by the escalation of retaliatory tariffs, which is likely to weigh down prices, leaving us neutral.
Currencies
🟡🔽 US $
We have downgraded to neutral due to the increase in uncertainty from President Trump’s policies and the excessive number of rate cuts already priced into US rates.
🟡 UK £
We remain neutral given recent signs of slower economic growth. There is also the risk that services inflation may not continue its recent decline due to persistent wage pressures.
🟢🔼EU €
We have upgraded to positive given that Germany is implementing a large-scale stimulus package, domestic growth expectations are improving, and the euro has not fully priced these in.
🔴 CNH ¥
We maintain our negative stance, as the CNH is a key target in the US-China trade tensions. We expect greater impact from retaliatory tariffs and a weaker CNH going forward.
🟡 JPY ¥
We remain neutral on the yen. The risk from trade tariffs appears to be low for now, which suggests it could serve as a safe-haven currency during market volatility.
🔴🔽Swiss franc ₣
We have downgraded to negative as Swiss inflation is consolidating, allowing the Swiss National Bank to support CHF depreciation. A Ukraine-Russia ceasefire could also reduce safe-haven demand for the currency.
Source: Schroders, March 2025. The views for equities, government bonds and commodities are based on return relative to cash in local currency. The views for corporate bonds and high yield are based on credit spreads (i.e., duration-hedged). The views for currencies are relative to the US dollar, apart from the US dollar which is relative to a trade-weighted basket.
Subscreva o nosso conteúdo
Visite o nosso centro de preferências e escolha que informação deseja receber por parte da Schroders.
Authors
Topics