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Inflation is on a downward trend, and interest rates are coming down too: could this combination of lower rates, ebbing inflation and greater certainty lead to more attractive returns from equity markets?
2024 has been an interesting and eventful year. Not least on the election front and after 2023’s backdrop of rising inflation we have started to see the central banks begin their interest rate cutting cycle, always a supportive backdrop for equity markets. Despite a year of political upheaval, low growth in many economies and continuing war in Ukraine and the Middle East, the world’s equity markets have, in aggregate, delivered double-digit returns this year – climbing the proverbial “wall of worry”.
Why? Well, investing is a forward-looking business. Investors have looked through political and geopolitical uncertainty to focus on falling inflation and the cuts to interest rates that it allows. Investors also thrive on certainty. Not 100% certainty – we can never have that – but a reasonable degree of clarity as to how things are likely to play out. People hold off making important decisions when they don’t have certainty over the future, which means that consumers, businesses and investors all tend to be careful about how they deploy their cash in uncertain times.
This is expanded on further in ‘Definitely maybe’ looking at reasons for growing confidence in 2025, alongside this our investment teams provide the outlook for their respective markets. The Global Emerging Markets team look at a supportive backdrop for their region and the exciting opportunities developing in China, India and a bright technological future. Zehrid Osmani in global equities considers the investor impacts from the ‘known unknowns’ following the change in leadership in the US and seismic shifts in areas such as Artificial Intelligence, the energy transition and aging populations. Our co-heads of UK equities, Ben Russon and Richard Bullas highlight the historically (and internationally) low valuations in the UK that offer access to a diverse range of interesting companies benefiting from an underappreciated UK economic strength.
2025 Investment Outlooks
Michael Browne - Definitely maybe
As we look forward to a new year, there’s a fair bit of 90s nostalgia in the air. Although the world faces many uncertainties, there are good reasons for investors to take heart as we enter 2025. So could nostalgia for an exuberant era signal a renewed period of confidence?
Global Emerging Markets - What lies ahead for Emerging Markets
Strong economic growth, easing inflation and interest rates should provide a supportive backdrop for EM equities and refocus the market on company fundamentals. We are excited about the opportunities in India, China and EM technology to drive the asset class in 2025 and beyond.
Global Long-Term Unconstrained - Five for 2025
The known unknowns in the US regarding tariffs, tax rates and deregulation are changing the dynamics for global equities in 2025. Zehrid Osmani looks at the impact for investors across the five key areas of inflation, monetary policies, growth, earnings, and valuations. We also highlight the long-term opportunities that persist from the seismic shifts in the energy transition, aging populations and artificial intelligence.
UK Equities - What is on the horizon for UK equities
Undervalued by historical and international standards, UK equities offer an exceptional opportunity for investors. They trade at both historically (and internationally) low valuations whilst offering access to a diverse range of interesting companies benefiting from an underappreciated UK economic strength, and its return potential is further buoyed by attractive dividend yields and share buybacks. We can’t predict when it will rerate, but when it does those invested could be richly rewarded.
Inflation is on a downward trend, and interest rates are coming down too: could this combination of lower rates, ebbing inflation and greater certainty lead to more attractive returns from equity markets?
2024 has been an interesting and eventful year. Not least on the election front and after 2023’s backdrop of rising inflation we have started to see the central banks begin their interest rate cutting cycle, always a supportive backdrop for equity markets. Despite a year of political upheaval, low growth in many economies and continuing war in Ukraine and the Middle East, the world’s equity markets have, in aggregate, delivered double-digit returns this year – climbing the proverbial “wall of worry”.
Why? Well, investing is a forward-looking business. Investors have looked through political and geopolitical uncertainty to focus on falling inflation and the cuts to interest rates that it allows. Investors also thrive on certainty. Not 100% certainty – we can never have that – but a reasonable degree of clarity as to how things are likely to play out. People hold off making important decisions when they don’t have certainty over the future, which means that consumers, businesses and investors all tend to be careful about how they deploy their cash in uncertain times.
This is expanded on further in ‘Definitely maybe’ looking at reasons for growing confidence in 2025, alongside this our investment teams provide the outlook for their respective markets. The Global Emerging Markets team look at a supportive backdrop for their region and the exciting opportunities developing in China, India and a bright technological future. Zehrid Osmani in global equities considers the investor impacts from the ‘known unknowns’ following the change in leadership in the US and seismic shifts in areas such as Artificial Intelligence, the energy transition and aging populations. Our co-heads of UK equities, Ben Russon and Richard Bullas highlight the historically (and internationally) low valuations in the UK that offer access to a diverse range of interesting companies benefiting from an underappreciated UK economic strength.
2025 Investment Outlooks
Michael Browne - Definitely maybe
As we look forward to a new year, there’s a fair bit of 90s nostalgia in the air. Although the world faces many uncertainties, there are good reasons for investors to take heart as we enter 2025. So could nostalgia for an exuberant era signal a renewed period of confidence?
Global Emerging Markets - What lies ahead for Emerging Markets
Strong economic growth, easing inflation and interest rates should provide a supportive backdrop for EM equities and refocus the market on company fundamentals. We are excited about the opportunities in India, China and EM technology to drive the asset class in 2025 and beyond.
Global Long-Term Unconstrained - Five for 2025
The known unknowns in the US regarding tariffs, tax rates and deregulation are changing the dynamics for global equities in 2025. Zehrid Osmani looks at the impact for investors across the five key areas of inflation, monetary policies, growth, earnings, and valuations. We also highlight the long-term opportunities that persist from the seismic shifts in the energy transition, aging populations and artificial intelligence.
UK Equities - What is on the horizon for UK equities
Undervalued by historical and international standards, UK equities offer an exceptional opportunity for investors. They trade at both historically (and internationally) low valuations whilst offering access to a diverse range of interesting companies benefiting from an underappreciated UK economic strength, and its return potential is further buoyed by attractive dividend yields and share buybacks. We can’t predict when it will rerate, but when it does those invested could be richly rewarded.
Important Information
This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.
The information contained in this document has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.
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Risk warnings – Investors should also be aware of the following risk factors which may be applicable to the strategy shown in this document.
- Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
- This strategy may hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the strategy’s value than if it held a larger number of investments.
- Smaller companies may be riskier and their shares may be less liquid than larger companies, meaning that their share price may be more volatile.
- Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.
- The strategy may invest in derivatives Index futures and FX forwards to obtain, increase or reduce exposure to underlying assets. The use of derivatives may result in greater fluctuations of returns due to the value of the derivative not moving in line with the underlying asset. Certain types of derivatives can be difficult to purchase or sell in certain market conditions.
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Martin Currie Inc, incorporated in New York with its registered office at 280 Park Avenue, New York, NY 10017 and having a UK branch registered in Scotland (no SF000300), Head office, 5 Morrison Street, 2nd floor, Edinburgh, EH3 8BH, Tel: +44 (0) 131 229 5252 Fax: +44 (0) 131 222 2532 www.martincurrie.com, operates under the International Adviser Exemption with the Ontario Securities Commission (‘OSC’) and is therefore currently not required to be registered as a portfolio manager for the purposes of MI 31-103. Martin Currie Inc. is also authorised by the UK Financial Conduct Authority.
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For professional investors:
In the People’s Republic of China:
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Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the strategy or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.
In Hong Kong:
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In South Korea:
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