Francis Chua

The fourth quarter of 2024 was a big one for global politics, with the most significant event for markets being Donald Trump winning the US presidential election. Over in Europe, we saw the sacking of the German Finance Minister as well as a 'no confidence' vote for the French Prime Minister amid budget disagreements. In Asia, martial law was briefly declared in South Korea.

While there may be some banana skins ahead, in the short-term, we believe economic data is likely to remain favourable and it will take several rounds of poor data points to significantly concern investors. We therefore hold a neutral view overall on risk assets, with a positive view on equities balanced by a negative view on investment-grade credit, particularly in the US where we now see credit spreads at 30-year lows.

With inflation at current levels, our models continue to see diversification benefits from its bond holdings.