Now’s the time to plan your legacy

Δ Overweight ∇ Underweight — Neutral

Equity – at a glance    Δ

22 AUGUST 2025

• We retain our Overweight allocation to global equities, underpinned by strong earnings, expected dovish pivot by the Fed to bolster economic growth and expectations of a soft landing in the US.
  
• We suggest maintaining a regionally diversified equity allocation and expect Asia ex-Japan equities to outperform global equities amid fading tariff headwinds. Within this region, we prefer markets with favourable policy support, including China and Korea equities. Both markets provide compelling valuations and measures to support innovative developments. India equities remain a core holding and we maintain a preference for mid-cap equities, where the earnings trend remains strong. We also have a core holding view in Japan and Europe ex-UK equities. Continual improvements in Japan’s shareholder returns and an economic recovery in the Euro area are supportive factors.
  
• We retain a core holding in US equities. Sustained earnings upside across major growth stocks, driven by AI-related investments,come despite deteriorating leading indicators and prolonged tariff uncertainties, which weigh on economic growth. We suggest trimming excessive overconcentration in US equities and increasing exposure after a market consolidation.
  

North America equities – Core holding     —

22 AUGUST 2025

The Bullish Case:

+ Earnings growth

+ AI uptrend

The Bearish Case:

– Valuations

– US trade policy uncertainty

Europe ex-UK equities – Core holding     —

22 AUGUST 2025

The Bullish Case:

+ Inexpensive valuations

+ German fiscal spending

The Bearish Case:

– US trade policy risks

UK equities – Less Preferred holding     ∇

22 AUGUST 2025

The Bullish Case:

+ Attractive valuations

+ dividend yield

The Bearish Case:

– Stagflation risks

– US trade policy risks

Japan Equities – Core holding     —

22 AUGUST 2025

The Bullish Case:

+ Reasonable valuations

+ rising dividends/share buybacks

The Bearish Case:

– JPY strength

– US trade policy

Asia ex-Japan equities – Preferred holding     Δ

22 AUGUST 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     —

22 AUGUST 2025

• Global bonds remain a core allocation in our foundation portfolios. Growing expectation of a 25bps Fed rate cut at the September meeting due to weakening growth data has put downward pressure on short-term interest rates. This is also likely to widen the yield differential between short- and long-dated bonds, as near-term bond yields are capped by rate cut expectations. Fed rate cuts will also drag future returns on cash deposits lower. Hence, we see an opportunity to lock in still-elevated yields via bonds, as returns on cash gradually decline. We expect the US 10-year bond yield to trade within the 4.00-4.25% range in the next 6-12 months as fiscal deficit and near-term inflation concerns prop up longer-maturity yields. Given this, we believe 5-7-year bond maturities offer the best risk-adjusted returns by striking a balance between attractive yields and fiscal/inflation risks.
  
• Outstanding opportunistic views: We remain bullish US Treasury Inflation-Protected Securities (TIPS), US short-duration High Yield bonds, and UK government bonds (Gilts) (FX-unhedged).  
  
• We close our bullish view on EM Asia local currency bonds, as the relative attractiveness of EM Asia has diminished compared with other EM regions.
  

Developed Market Investment Grade government bonds – Core holding     —

22 AUGUST 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     ∇

22 AUGUST 2025

The Bullish Case:

+ High credit quality

+ sensitive to falling yields

The Bearish Case:

– Elevated valuations

Developed Market High Yield corporate bonds – Core holding     —

22 AUGUST 2025

+ Attractive yield

+ Low rate sensitivity

The Bearish Case:

– Elevated valuations

– Sensitive to growth

Emerging Market USD government bonds – Core holding     —

22 AUGUST 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

22 AUGUST 2025

+ Attractive yield

+ Benefit from USD weakness

The Bearish Case:

– US trade policy risks

Asia USD bonds – Core holding   —

22 AUGUST 2025

The Bullish Case:

+ Moderate yield

+ Low volatility

The Bearish Case:

– Sensitive to China growth

Δ Overweight     ∇ Underweight    — Neutral

Commodities – at a glance

22 AUGUST 2025

• Gold to stay rangebound around USD 3,400/oz over the next 1-3 months until US growth risks become clearer.
  
• Excess supply in the oil market remains a headwind. 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

22 AUGUST 2025

Gold      —

22 AUGUST 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     —

22 AUGUST 2025

The Bullish Case:

+ Diversifier characteristics

The Bearish Case:

– Equity, corporate bond volatility

Δ Overweight     ∇ Underweight    — Neutral

Multi-Asset – at a glance

22 AUGUST 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.