Daniel Schoeman

Risk assets continue to benefit from a favourable macro backdrop, supported by resilient global growth, a dovish Fed bias and ongoing corporate earnings strength. US economic momentum has moderated but there seems to be no imminent recession trigger.

However, a lot of good news has been priced into markets and valuations are stretched, especially in the US. With US equities trading at elevated forward price/earnings multiples, credit spreads remaining tight, and markets pricing in significant Fed easing, caution is warranted. Additional stimulus, particularly the aggressive rate cuts sought by President Trump, risks reigniting inflation pressures just as tariffs start filtering through to consumer prices.

While 10-year yields suggest bond market complacency, 30-year rates hovering near multi-decade highs signal a looming shift in sentiment and may weigh on risk assets in the medium term.

In this context, we remain diversified, with allocations to risk assets close to the strategic benchmarks of the portfolios, neutral to local bonds, but underweight global bonds and overweight shorter-dated offshore bonds and cash.