Foord’s 2025 global investment outlook

The year 2024 has been a rollercoaster ride for the global markets, influenced by various factors that have shaped the investment landscape. Gold and copper witnessed significant gains, while South African equities and the rand rallied following a positive outcome in local elections. The US economy displayed unexpected resilience, and falling yields provided a boost to interest-rate sensitive sectors like real estate and bonds. As the world prepares to transition into 2025, a different market picture is expected to unfold. Rashaad Tayob, Portfolio Manager and Head of Fixed Income at Foord Asset Management, provided valuable insights into their 2025 investment outlook during a recent interview with CNBC Africa. Reflecting on the key events that drove the markets in 2024 and the influencing factors likely to shape the markets in 2025, Tayob emphasized the impact of politics on the market sentiment. With the South African elections and the formation of the GNU in 2024, a positive political outlook emerged, while global tensions preceding the US election added uncertainty. Looking ahead to 2025, Foord Asset Management anticipates thriving through strategic investment approaches. The discussion at Foord Asset Management highlighted several key insights for navigating the investment landscape in 2025. Portfolio Manager Ishut expressed optimism regarding China's market performance, citing attractive valuations and growth potential. Brian Narcisse emphasized the significance of utilities, particularly electricity utilities, amid the ongoing electrification trend. Tayob cautioned investors to remain vigilant against potential inflation resurgence and advised steering clear of businesses with shaky fundamentals. When prompted about the potential impact of Trump's policies on monetary policy outlook, Tayob underscored Trump's stance on monetary policy and his inclination towards stimulating the economy. With the possibility of increased tariffs disrupting global trade, Tayob highlighted the potential inflationary consequences and the need to monitor inflation closely in the upcoming year. Expanding on market opportunities, Tayob highlighted the attractiveness of inflation-linked bonds in managing inflation risks. He pointed out the elevated real yields on these assets, offering investors protection against rising inflation and potential upside returns. However, Tayob also warned of complacency in the market regarding inflation and economic growth, citing excessive government spending as a risk to bond markets in 2025. In terms of balancing local and global market opportunities in 2025, Tayob emphasized the importance of diversification and leveraging global opportunities. While acknowledging the improved growth outlook in South Africa post-election, Foord Asset Management maintains a balanced approach, gradually increasing global exposure while monitoring the strength of the rand. Tayob reiterated the significance of global exposure for return and diversification purposes, underscoring the ongoing risks in the South African market. As investors gear up for the uncertainties and opportunities of 2025, strategic asset allocation and a keen focus on emerging trends will be crucial for navigating the dynamic investment landscape. Foord Asset Management's insights offer valuable perspectives for investors seeking to navigate the complexities of the global markets and position themselves for success in the year ahead.