Mirabaud Multi Assets - Flexible N cap. EUR

Performance update

The return of a negative correlation between equity and bond markets means that a well-balanced portfolio can once again perform satisfactorily while cushioning market shocks. Over the longer term, the phase of economic normalisation calls for greater diversification of equity exposure beyond large technology companies with high concentration risk. In the bond markets, an allocation to the highest-quality sovereign bonds remains essential should economic activity disappoint. In Europe, the risk of rising yields is relatively low, given our expectations for growth and inflation, and we prefer a longer positioning on the curve. On the credit side, we expect continued high growth in the US and a slight recovery in Europe, with corporate bonds continuing to do well. Policy rate cuts, a cyclical recovery and tax cuts are a positive mix for equity markets in the short term. Finally, the monetary policy differential between the US and the rest of the world, which reflects a difference in growth dynamics, and Trump administration trade policies, should have a positive influence on the value of the US dollar in 2025.

Portfolio activity

We maintained the overweight exposure to US equity markets that we implemented after the US elections. We expect Republican policy to be positive for the asset class. Lower taxes, deregulation measures and more fiscal spending are expected to support domestic activity and company earnings in 2025. We increased our US mid-cap positions, which offer attractive potential for valuation catch-up in this environment. In the fixed income segment, we continued to be overweight on eurozone sovereign bonds. Inflation should continue to converge to the European Central Bank's target, with the bank having begun its easing cycle, which will likely last until the end of next year. We are more cautious on US Treasuries as higher tariffs and more fiscal spending will increase inflation expectations. We continue to hold dollar and gold positions to provide diversification against geopolitical risks and the risk of trade wars under Trump. Because of higher tariffs, we also remain cautious on China as fiscal stimulus is not really convincing at the moment, and Chinese growth will be negatively impacted if higher tariffs are implemented on exports.