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New Perspectives: Chapter 3

Navigating New Waters—Holding Course for Resilience

Geopolitical tensions, the rapid rise of artificial intelligence with its opportunities and risks, and a new U.S. trade policy have fundamentally impacted market dynamics. For Investors, these shifts have created an environment of heightened volatility. While economic growth may persist, so too may uncertainty. How can investors adapt to this evolving landscape and uncover new opportunities?

Our experts have identified three key measures to help investors build more resilient portfolios and navigate these new waters with confidence.

Three measures to increase portfolio resilience

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Unlock stable sources of income

Companies with consistent dividend payouts can help cushion the impact of fluctuating stock prices and provide greater return predictability.

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Explore future-driven themes

Sectors shaped by long-term structural trends, such as cyber defense and security , tend to be more resilient to disruptive market events.

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Leverage recognized diversifiers

Diversifying across asset classes—including alternatives and foreign exchange—can enhance portfolio stability.

Also relevant in this context: Five theses on U.S. trade policy, offering additional insights into current market dynamics.

Protecting the future with cyber defense and security

From data breaches to ransomware attacks—cyber threats are growing both in frequency and sophistication at an unprecedented pace. As a result, cybersecurity has shifted from being a niche concern to becoming a cornerstone of national security and economic resilience. Targeted investments in cybersecurity offer investors the opportunity to participate in the growth of this increasingly vital sector.
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Three characteristics of a resilient portfolio

 

Resilient building blocks

A resilient portfolio includes components which can help to mitigate the impact of significant market downturns, reducing overall portfolio-level drawdowns.

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Smart risk management

Resilient portfolios prioritize managing risk while maintaining the potential for long-term returns, striking a balance between stability and growth.

Low-correlation assets

Incorporating assets with low or negative correlations to one another helps ensure that the portfolio remains stable across varying market conditions.

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New perspectives: Chapter 2

Five impacts of U.S. trade policy and what these could mean for investors

Recent changes in U.S. trade policy have led to far-reaching shifts in global trade. Increased tariffs and the associated uncertainty are calling established trade partnerships into question and are leading to a restructuring of global supply chains. What impact could these changes have on the different markets and the global economy as a whole? Our experts have developed five theses.  

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1. Relocation of supply chains to domestic markets

  • New tariffs are influencing global trade dynamics.
  • Supply chains will be relocated closer to domestic markets.
  • Uncertainty about economic growth could lead to persistently high interest rates.

Investments with more reliable income streams could help to counter the uncertain economic situation.

2. Growing risk of trade wars

  • Trade tariffs imposed by individual countries can often lead to countermeasures.
  • Due to the recent changes in U.S. trade policy and the resulting tariff uncertainties, existing trade partnerships are being called into question and new ones are being formed.

Markets with lower risk of trade conflicts could benefit from the formation of new partnerships.

Photo of a truck driving through a metal gate with a long fence in the background.
Photo of a truck driving through a metal gate with a long fence in the background.

2. Growing risk of trade wars

  • Trade tariffs imposed by individual countries can often lead to countermeasures.
  • Due to the recent changes in U.S. trade policy and the resulting tariff uncertainties, existing trade partnerships are being called into question and new ones are being formed.

Markets with lower risk of trade conflicts could benefit from the formation of new partnerships.

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3. Emerging markets on the rise

  • Economies with similar export structures and geographical proximity to China could benefit.
  • Other criteria for suitable countries include competitive labor costs, good infrastructure, and a qualified workforce.

Investments in selected emerging markets that are not impacted by U.S. tariffs may increase.

4. Tailwind for pharma, biotech and healthcare

  • Given the political significance of these sectors for the U.S. and the EU, rapid and consistent restructuring of the supply chains can be expected.
  • The relocation of supply chains is expected to shift the high turnover of Chinese companies in the U.S. to suppliers outside of China.

Companies outside of China that are well positioned to produce goods and provide services in the pharmaceutical, biotech and healthcare sectors could benefit.

Photo of a laboratory with a desk in the center and several bottles containing blue liquid placed on it.
Photo of a laboratory with a desk in the center and several bottles containing blue liquid placed on it.

Tailwind for pharma, biotech and healthcare

  • Given the political significance of these sectors for the U.S. and the EU, rapid and consistent restructuring of the supply chains can be expected.
  • The relocation of supply chains is expected to shift the high turnover of Chinese companies in the U.S. to suppliers outside of China.

Companies outside of China that are well positioned to produce goods and provide services in the pharmaceutical, biotech and healthcare sectors could benefit.

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5. Temporary inflation in the U.S.

  • Tariffs lead to higher prices for importing countries, which can trigger temporary inflation depending on consumer demand.

A temporary inflation period in the U.S. could offer good opportunities for fixed income securities.

Strategies for growth-oriented portfolios

There are a number of strategies that can be added to a portfolio to participate in market movements.

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It's time for Europe, it's time for income

Changes to fiscal and defence policies, coupled with the end of austerity, are reshaping the market environment. Find out how these changes could create new income and long-term growth opportunities in European equities.

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Momentum strategies

These strategies are based on the expectation that successful trends will continue over a minimum period of time. Using a systematic approach, such trending stocks can be identified at an early stage, categorized according to momentum and added to the portfolio on an ongoing basis. ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎

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Recovery strategies

Even in years of solid equity performance, individual stocks can decouple from the market and underperform. Recovery strategies target companies that have suffered share price losses and then take strategic action to restore their competitiveness. ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎

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