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Δ Overweight     ∇ Underweight    — Neutral

Equity – at a glance     Δ

25 JULY 2025

• We remain Overweight global equities, underpinned by strong earnings, fiscal stimulus in key markets and expectations of a soft landing in the US. Near-term pullbacks on the back of trade or inflation fears would offer opportunities to add exposure.
  
• We expect Asia ex-Japan equities to outperform within global equities, bolstered by the weak USD, which boosts returns for USD-based investors and hence supports fund inflows. China and Korea equities are in focus. Valuations are still attractive; supportive government policies and artificial intelligence innovation are propelling equities higher. India equities remain a core holding, with a shift in preference from large caps to mid-caps, where there is a strong trend in earnings growth.
  
• We retain a core allocation to US equities. A resilient macro backdrop and robust earnings growth in the US are positive factors, counteracting concerns about US’s fiscal sustainability. USD weakness boosts US earnings, but normally undermines US equities relative to non-US markets. We suggest trimming excessive long positioning in US equities.
  

North America equities – Core holding     —

25 JULY 2025

The Bullish Case:

+ Earnings growth

+ AI uptrend

The Bearish Case:

– Valuations

– US trade policy uncertainty

Europe ex-UK equities – Core holding     —

25 JULY 2025

The Bullish Case:

+ Inexpensive valuations

+ German fiscal spending

The Bearish Case:

– US trade policy risks

UK equities – Less Preferred holding     ∇

25 JULY 2025

The Bullish Case:

+ Attractive valuations

+ dividend yield

The Bearish Case:

– Stagflation risks

– US trade policy risks

Japan Equities – Core holding    —

25 JULY 2025

The Bullish Case:

+ Reasonable valuations

+ rising dividends/share buybacks

The Bearish Case:

– JPY strength

– US trade policy

Asia ex-Japan equities – Core holding     Δ

25 JULY 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     —

25 JULY 2025

• Foundation: Global bonds are a core allocation. Interest rate volatility is likely to continue in the near term, with concerns over fiscal deficits, tariffs and mixed economic data. Yield differentials between long- and short-dated bonds are elevated, but have failed to break significantly higher. A slowing job market in H2 25 should open the door for the Fed to cut interest rates in September. As short-term interest rates move lower, we expect the US 10-year government bond yield to move in tandem towards 4.00-4.25% in the next 6-12 months. We view any yield rebounds above 4.50% as attractive opportunities to add exposure to USD bond portfolios. We believe 5-7-year bond maturities offer the best risk-adjusted returns as they strike a balance between attractive yields and fiscal/inflation risks.
  
• New opportunistic idea: US short duration High Yield (HY) bonds offer attractive risk-adjusted returns. 
  
• Existing opportunistic ideas: Bullish Emerging Market (EM) Asia local currency (LCY) bonds; bullish US Treasury Inflation-Protected Securities (TIPS) and bullish UK government bonds (FX-unhedged). 
  

Developed Market Investment Grade government bonds – Core holding     —

25 JULY 2025

The Bullish Case:

+ High credit quality

+ Attractive yields

The Bearish Case:

– High sensitivity to inflation

– Monetary policy

Developed Market Investment Grade corporate bonds – Less Preferred holding     ∇

25 JULY 2025

The Bullish Case:

+ High credit quality

+ sensitive to falling yields

The Bearish Case:

– Elevated valuations

Developed Market High Yield corporate bonds – Core holding     —

25 JULY 2025

+ Attractive yield

+ Low rate sensitivity

The Bearish Case:

– Elevated valuations

– Sensitive to growth

Emerging Market USD government bonds – Core holding     —

25 JULY 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 – Preferred holding     Δ

25 JULY 2025

+ Attractive yield

+ Benefit from USD weakness

The Bearish Case:

– US trade policy risks

Asia USD bonds – Core holding    —

25 JULY 2025

The Bullish Case:

+ Moderate yield

+ Low volatility

The Bearish Case:

– Sensitive to China growth

Δ Overweight     ∇ Underweight    — Neutral

Commodities – at a glance

25 JULY 2025

• Gold is expected to remain rangebound around USD 3,400/oz until US growth risks and trade policy become clearer.
  
• Oversupply remains the dominant theme in oil markets. We expect West Texas Intermediate (WTI) crude oil prices to trade in a range around USD 65/bbl over the next 3-12 months. Geopolitical risks may result in temporary spikes in oil prices.
  

Oil

25 JULY 2025

Gold      —

25 JULY 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     —

25 JULY 2025

The Bullish Case:

+ Diversifier characteristics

The Bearish Case:

– Equity, corporate bond volatility

Δ Overweight     ∇ Underweight    — Neutral

Multi-Asset – at a glance

25 JULY 2025

Our multi-asset income (MAI) strategy has remained resilient amid all the noise and turbulence in Q2 25, delivering 2.1% over the past 3 months, with solid performances from dividend-paying equities, High Yield (HY) bonds, Emerging Market (EM) Local Currency (LCY) bonds and sub-financials.

Our MAI strategy continues to deliver a steady yield of c. 5.7%, which remains attractive in the current rate environment. Over the next 6-12 months, we expect the Fed to resume interest rate cuts. Investors should look to lock in higher income, capitalising on yield spikes to benefit from attractive income and potential capital gains.

Under our base case of a US economic soft landing, we continue to see further upside in equities and thus remain comfortable in tilting slightly in favour of equities over fixed income. Our equity allocations are balanced between income-generating equities and traditional growth equities. Within fixed income, our expectation of a weaker USD supports our case for increased allocations into EM LCY bonds. Lastly, we expect US Agency Mortgage-Backed Securities (MBS) to continue to outperform Developed Market (DM) Investment Grade (IG) government bonds.