Jasper Thornton-Boelman

We believe maintaining a neutral risk position remains prudent as we look ahead to 2025 and beyond. A resurgence in inflation continues to pose a key risk to markets, with any further monetary policy easing will depend on a smooth and sustained decline toward target levels. Regardless of whether the Fed or BoE deliver additional rate cuts in the coming months, we see limited scope for yields to fall—unless significantly negative economic data emerges. Consequently, bond investors should expect the current yield on their holdings to comprise the bulk of total returns.

We continue to overweight small-cap equities, both through direct asset allocation and via our SMID-cap fund managers. Recent strong performance in the US was catalysed by the recent rate cut and could persist as the "One Big Beautiful Bill" begins to impact the economy. While aspects of the bill may be contentious from a humanitarian standpoint, it is broadly supportive of business activity.

We are also monitoring the recent strength in China’s onshore market, which we expect to continue. The retail-dominated investor base often drives sporadic performance, with valuations prone to sharp swings. As such, our overweight position remains in place.

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