Debate with winners of the Asset Allocation Awards 2025

May 2, 2025

_{This panel report was originally written in Dutch. This is an English translation.}

On 11 February, the tenth edition of the Asset Allocation Awards ceremony took place at Vlerick Business School in Brussels. This annual event, organised by Alpha Research, not only provided a platform for the presentation of the prestigious awards, but also for an in-depth debate with all the winners. And that debate yielded some interesting insights.

By Eelco Ubbels

The Asset Allocation Awards were organised for the third time this year in collaboration with Financial Investigator, and for the second time in Belgium. The debate provided a clear picture of the challenges and opportunities in the market for 2025.

The Awards are presented to asset managers who have made the most successful allocation recommendations based on consistent research and consistent returns. Alpha Research analyses approximately 65 reports from asset managers every month and uses them to compile model portfolios. The assessment is based on an equally weighted portfolio without benchmark weighting. An overweight asset is given a weighting of +5%, while an underweight asset is given a weighting of -5%. The five best-performing portfolios over a three-year period are nominated and the best-performing portfolio receives the award.

These are the winners for 2025:

• Overall: Northern Trust
• Asset Allocation: Vontobel
• Fixed Income: Nuveen
• Equity Sectors: ING Investment Office
• Regional Allocation: J. Safra Sarasin

After the award ceremony, the Asset Allocation Debate took place, focusing on the influence of macroeconomic trends, geopolitical tensions and the recent re-election of Donald Trump as President of the United States. This debate was moderated by Eelco Ubbels, Director of Alpha Research, and was conducted by the five award winners. In attendance were Angelo Manioudakis, Global Chief Investment Officer at Northern Trust Asset Management, Laura Cooper Scott, Investment Strategist at Nuveen, Dan Scott, CIO and Head Multi Asset at Vontobel, Frédéric Degembe, CIO at ING Belgium, and Wolf von Rotberg, Equity Strategist at J. Safra Sarasin.

A quick round of Trump

Each winner was first asked a short question about the possible consequences of Trump's second term as president:

What effect will Trump have on your asset allocation for the next 3 to 12 months?

Angelo Manioudakis: ‘Since you want a short answer, I would say “risk on”. However, I am somewhat cautious, because although there is optimism, geopolitical uncertainty remains.’

Is there a preference for equities or bonds under Trump?

Dan Scott: ‘Trump's policy of low taxes and deregulation is positive for risky assets in the short term, so equities are worth considering. Stimulation of the US economy remains an important factor, but we need to be alert to structural changes.’

The recent consensus favours US equities. Do you agree?

Wolf von Rotberg: ‘Trump has given European equities an advantage through the strong dollar. Higher US valuations compared to the rest of the world are justified, but overall US equities are expensive. We will not see the same group of equities dominating the market this year. Moreover, we see that the effects of Trump's trade policy are not only affecting the US, but also Europe and Asia, making sectoral impact an important factor.’

The US economy is performing very well at the moment, partly due to fiscal stimulus over the past two years.

What does Trump in the White House mean for equity sectors?

Frédéric Degembe: ‘We have reduced our overweight in technology. Financials could become interesting due to potential deregulation. In addition, a reduction in corporate tax could give these sectors an extra boost. But the question is how sustainable these incentives will be.

What consequences do you expect for fixed income?

Laura Cooper Scott: ‘Investors have already taken into account possible measures by the Trump administration. We are cautious about duration risks, but the possibility of higher returns on fixed income is attractive. It is a ‘higher for longer’ environment. Inflation also remains a factor to take into account, especially if new fiscal stimulus measures are implemented. This could mean that central banks will have to re-evaluate their policies.

Macroeconomics and geopolitics

The debate then shifted to whether the current high valuations of US equities are an obstacle to further growth. Von Rotberg said: ‘America is expensive, Europe and China are cheaper. The US economy is performing very well at the moment, partly thanks to fiscal stimulus over the past two years. However, the momentum of US equities may slow down slightly. Current valuations are largely justified by strong corporate earnings and the robust economy, but we need to remain cautious about sector rotations and possible corrections.’

Scott, on the other hand, was optimistic: ‘The S&P could still rise by 10% to 15% this year. That is why we remain overweight in US equities. Growth expectations remain high, especially in technology and consumer-oriented sectors. Historically, US companies have proven to be resilient, even in challenging economic times.’

The level of government debt has risen significantly, which could have long-term consequences for the stability of the bond markets.

Manioudakis added: ‘We are moderately positive about US equities. We analyse bottom-up and are fairly confident about growth in gross profits (top-line growth), margin growth, further share buybacks and dividend growth of 6% to 7%. However, we do take into account a mean reversion of multiples towards the long-term average. The market is strong, but you need to be cautious about sector exposures.

Fixed income and asset allocation

The section on fixed income discussed the opportunities and risks. Cooper Scott stated: ‘Inflation is high and we could see interest rate cuts being delayed. The economic backdrop is healthy, expected defaults are low and some sectors are less vulnerable to import tariffs. However, fiscal deficits remain a concern. Government debt levels have risen significantly, which could affect bond market stability in the long term.’

Degembe reflected ING's neutral position: ‘We are underweight in government bonds due to rising sovereign debt. We prefer investment grade. We are cautious on high yield, as it is equity-like. The right selection of bonds will be crucial in this market. We are paying close attention to the fundamentals of issuers and are not taking any unnecessary risks.’

Manioudakis added: ‘Private credit is our favourite asset class. We are somewhat contrarian on high yield, with an overweight of 6% (recently 5%), with narrow spreads. The index is high quality and defaults will increase slightly, but spreads will remain slightly wider. Not cheap, but the quality is there. We are taking the 7% coupon.’

What are the hot potatoes?

Strategists and CIOs spend a lot of time selecting the best asset class. But sometimes it is just as important to determine which assets are best avoided. That is why the panellists were asked at the end: which asset class do you consider a hot potato that you would rather not have in your portfolio?

The right selection of bonds will be crucial in this market. We pay close attention to the fundamental factors of the issuers and do not take any unnecessary risks.

Scott emphasised the importance of diversification: ‘Risks are unpredictable, which is why diversification is essential. We have allocated part of our portfolio to liquid alternatives, such as cat bonds, which makes us less dependent on government bonds. The concept of the risk-free rate has changed since 2022, and investors need to take this into account in their strategy.’

Cooper Scott explained her organisation's approach: ‘We are cautious about duration, despite the US economy losing momentum. We are taking a quality-enhancing approach to fixed income and avoiding highly volatile assets such as cryptocurrencies, despite the renewed sentiment for this asset class.’

The level of government debt has risen significantly, which could have long-term consequences for the stability of bond markets.

Von Rotberg indicated that certain sectors are less attractive within equities: ‘We are avoiding the consumer discretionary sector in the US. The sector remains sensitive to economic cycles and inflationary pressures, and the outlook is not convincing enough at this point.’

Degembe mentioned another strategy: ‘For us, it's simple: we are underweight in cash. When it comes to US equities, we prefer domestic companies to exporters. Domestic companies can benefit from fiscal stimulus and more stable demand, while exporters face trade restrictions and exchange rate risks.’

Manioudakis explained how his organisation allocates: ‘We work with a quantitative strategy and avoid low-quality stocks that are too dependent on momentum. We prefer to focus on companies with strong fundamentals and a robust growth profile.’