Summary: What this article covers
As the global landscape shifts rapidly, investors are being challenged to reassess long-held assumptions. In this article, we explore:
- The end of US dominance as a given - and where new opportunities are emerging
- How companies are responding to tariffs and policy shifts
- Why global diversification is no longer optional
A new investment era is emerging
For years, many investors have operated on a relatively stable set of assumptions: the US will lead developed market growth, policy changes are incremental, and economic disruption is cyclical. But 2025 has made it clear - we are now living in a more complex, multipolar, and unpredictable world.
What we are seeing is more than market noise. It’s a global rewiring. Trade relationships, supply chains, technological infrastructure, and policy settings are all in flux. And with that comes both uncertainty - but also opportunity.
From volatility to resilience: Shifting our mental models
Volatility is nothing new in equities. But after several years of relative calm, we’ve entered a period where the range of potential future scenarios for economies, industries and company outlooks has fanned out - and with that comes the likelihood of many more spikes in volatility as the variables change.
In this kind of environment, our investment team doesn’t aim to predict the future, but we do think deeply about what is likely and what could be possible - calibrating and recalibrating for multiple potential scenarios. The hypothetical must be translated into the tangible - we model financial implications and the consequences for potential investment return. We ask: What does the new bull case look like? The new downside case? Who is resilient through tariff hikes, oil shocks, or liquidity stress?
This is where active management proves its worth. We can’t control the noise, but we have the expertise and diligence to find the signal of opportunity within.
The tariff reset - and what companies are really saying
Liberation Day marked a turning point in the global tariff regime. While not as extreme as initially feared, the direction of travel is clear: tariffs are rising, with very significant uncertainty remaining over their ultimate level and impact.
What’s perhaps surprising is how this has impacted sentiment. One key insight from our analyst network: companies in emerging markets (EM) are more confident in their flexibility than those in some developed economies. Where once EMs were viewed as most vulnerable, today we’re hearing greater concern from developed-world corporates around cost structures, supply chain risk, and policy variability.
This is leading companies to re-evaluate investment decisions, logistics, and how they protect the trajectory of their competitive positioning. It’s a reminder that bottom-up analysis must be paired with top-down awareness - they’re increasingly inseparable.
Is US exceptionalism ending?
This is a question many of us are asking. Over the last decade, US equity markets outperformed their developed world peers - driven not only by GDP growth, but by remarkable capital efficiency and profitability, particularly among the tech giants.
But can it continue?
Expectations for US GDP growth are being downgraded, while treasury markets are jittery with high fiscal deficits looking likely to continue. The rapid price recovery from April’s downdraft coupled with the marking down of earnings expectations mean that valuation multiples have risen over 2025. Further gains will then be difficult without flawless execution - a continuation of meet, beat and raise - from across the market, including the Mega-cap leaders of recent years.
At the same time, the profitability and returns of European companies has been gradually increasing over many years and the economic heart of the continent now looks set to be jolted by both fiscal and monetary stimulus. There is renewed impetus for cohesion, reduced bureaucracy, and meaningful investment in infrastructure and defence. Meanwhile, China is reasserting itself with measured policy responses while its companies impress with a new wave of innovation and ambition for global disruption.
Looking ahead: Steady hands in a shifting world
So what excites me most about the year ahead? Yes it’s looking for the innovators that will change how we interact, spend and live - but it’s also a much more grounded quality - it’s resilience.
Companies with stable cash flows, strong balance sheets, and room for reinvestment will shine in this environment. And investors who are globally diversified, open-minded, and long-term oriented will be well placed to benefit. Now is a time to look broadly for the best investment opportunities across the globe.
