From Morningstar: 2024-12-11 04:16:38

Asset managers are preparing their predictions for 2025, focusing on gold and artificial intelligence. Fund companies hoped for a UK equity comeback in 2024, but not all predictions came true. US exceptionalism remains strong, with the economic divergence between the USA and Europe expanding.

US equities are expected to perform well in 2025, with optimism stemming from the US Federal Reserve’s potential rate cuts. AI trends are set to drive equities, with opportunities for growth in tech companies. Smaller firms can thrive by building successful businesses on new infrastructure as AI evolves.

Europe faces stagnant economic growth and potential tariffs from the US. European companies will continue to play a critical role in the AI value chain. UK stock valuations are under scrutiny, with mixed outlooks on the market’s performance for 2025.

Japan’s equity market is expected to see steady growth, but concerns about a strong yen and higher interest rates remain. Emerging markets may outperform developed markets, with opportunities in countries like India, which is expected to remain a bright spot in 2025.

The outlook for bonds is positive, with opportunities in high yield credit and emerging market debt expected to benefit from rate cuts. Gold is a standout asset class for 2025, with central banks continuing to buy gold to diversify currency exposure. Alternative investments offer solutions for investors in a volatile market.



Read more at Morningstar: AI and Interest Rates: UK Fund Managers’ 2025…