Authored by: Vivian Gan

Asia Insights: Managing Risk Through Diversification

Asian and global market volatility surged in early 2025 as US tariffs triggered global growth fears. Given the export-oriented nature of most Asian economies and their sensitivity to global growth and demand, the region may bear the brunt of US tariffs. As such, Asia market volatility is likely to persist in the near term, particularly since US trade policy can shift abruptly.

2025 Outlook: Public Equities

We expect developed markets value and small-cap equities to outperform, given our economic views and their steep valuation discounts. Regionally, we believe US equity performance will not match the level set in 2024, allowing European, Japanese, and emerging markets equities to perform more in line with broader developed markets. Within emerging markets, strong Indian equity gains should moderate, while we doubt Chinese equities will collapse. At the same time, we expect long/short equity strategies will perform better than typical.

2025 Outlook: Currencies

We expect the US dollar rally will ultimately cool, with early strength giving way to modest weakening. Meanwhile, gold returns are likely to moderate in 2025 after a surge in 2024. Emerging markets’ use of stablecoins should support positive crypto returns, driving blockchain innovations and investment opportunities.