The fund manager Citi Wealth published its investment outlook report for 2025 and the title of its strategies could not be more interesting: “2025 Breaking the investment rules.”
Despite defying signs of recession it is generally expected that markets continue with global economic expansion continue in 2025 and 2026. Citi Wealth forecasts that global GDP will increase 2.9% in 2025 and 2026, up from 2.6% in 2024, with the United States as the main growth driver. The US growth forecast for 2025 has also been updated to 2.4%.
““We recommend our investors keep core portfolios fully invested for the long term, while being cautious about overconcentrated portfolios.”said Steven Wieting, Chief Investment Strategist and Economist at Citi Wealth. “The long period of strong performance by US large-cap stocks has depressed future returns, while many other assets, including US small-cap growth stocks and international markets, offer opportunities. potentials”.
The only “but” that the manager estimates is something that we already have in the market and that is an increase in market volatility. The Trump administration is projected to pursue policies that prioritize domestic activity and that could stoke international tensions. Risks include a potential trade war, highly valued stock markets and US growth becoming unsustainable.
“With systemic trends driving global economic growth in 2025 and beyond, investors have reason for optimism,” said Andy Sieg, senior analyst. “At the same time, discord around the world may threaten market stability. With so many variables to consider, it is important that investors have advisors they can trust.”
In the report, Citi Wealth examines four unstoppable trends, powerful long-term forces that are transforming the way we live and work:
AI: More and more Real: Spending on AI capabilities continues to increase around the world. AI adoption has primarily benefited the technology sector to date, but the benefits may now spread. Citi Wealth identifies healthcare, finance, robotics, education and agriculture as potential beneficiaries, although slower-than-expected business results remain a risk.
Climate: Invest in Innovative Technologies: Extreme weather events have highlighted the need for more action to address climate change, including emissions reduction, carbon capture and adaptation. Citi Wealth encourages exposure to manufacturers, installers and users of innovative technologies in these areas.
The Health Recipe for Longevity: An aging population is putting pressure on health budgets around the world, so it is vital to try to keep people healthier for longer. Citi Wealth believes that specialist health managers have investment potential.
Portfolio Positioning amid the Polarization between the United States and China: The strategic rivalry between the United States and China may intensify under the Trump administration. As the “G2” powers look to strengthen their supply chains, certain industries in Southeast Asia, Latin America and the United States may benefit.
In addition, the manager highlights ten opportunistic positions that it believes can complement the main portfolios, depending on the investor’s objectives:
1. Semiconductor equipment manufacturers
2. Medical equipment
3. Biotechnology
4. Defense contractors
5. American banks
6. Midstream energy transportation
7. Nuclear energy
8. Positioning for renewed volatility
9. Enablers of cryptocurrency growth
10. Brazilian stocks
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