In the first half of 2025, market forces like U.S. policy shifts, volatility, and equity valuations began to shape the investment landscape. Diversifying portfolios beyond the traditional 60/40 framework is crucial for navigating the changing market environment. Uncertainty around tariff policy, geopolitical tensions, and economic data will complicate decision-making for the Federal Reserve. Investors are encouraged to consider alternative strategies for portfolio stability in times of uncertainty.

Equity market-neutral strategies performed well in the first half of the year, despite tariff concerns and market volatility. Deregulation and tax policies may offer support, but high U.S. equity valuations suggest that market-neutral strategies can continue to add value. Discretionary macro managers and managed futures with diversified sub-strategies are recommended for navigating the market conditions expected in the remainder of the year.

The Societe Generale Trend Index and Short Term Traders Index performance over Q1 2025, Q2 2025, YTD 2025, and a 12-month period is shown in a bar graph. This material provides general information and does not offer specific advice or recommendations. Diversification may not guarantee higher returns or protect against market risk, and asset allocation does not eliminate the possibility of loss.

Read more at Investing.com: Why the 60/40 Portfolio Falls Short in a Fragmented Macro Regime