Outlook 2025: Julie Dickson (Capital Group)

Outlook 2025: Julie Dickson (Capital Group)

Vooruitzichten Outlook 2025

By Julie Dickson, Investment Director, Capital Group

What is the economic outlook for the rest of 2025?

‘The world has left the old order behind and recently entered the trade battlefront scenario, characterized by significant tariffs, technology export restrictions, and other protectionist measures that would accelerate economic decoupling and supply chain shifting. If the world remains in a protracted trade struggle, economic growth will likely be more subdued, and inflation could rise. If these tariffs are around long term, we are likely to see slower growth beyond 2025. On the other hand, if trade deals are struck relatively quickly, then a transition to the grand bargain scenario becomes more likely. This is a time to pay close attention to valuations and dividend income, when boring is beautiful.

Where are the biggest opportunities and threats for investors?

‘After a long stretch of mega-cap tech dominance, Q1 saw a rotation into undervalued areas: health care, consumer staples, dividend payers, non-US equities, and small/mid-caps. Now more than ever, it’s important to navigate markets actively and selectively.

A core allocation – rather than a focus on a particular style – feels most appropriate given today’s volatility and uncertainty. The reshoring trend in the US could benefit select industrials. Globally, overlooked pharmaceutical firms offer value, as do dividend-paying utilities, banks, and defense companies. Europe’s pivot to stimulate internal demand could boost domestically focused firms, while China’s travel and gaming sectors may benefit from recent developments. Despite volatility, elevated yields and lower correlations make bonds attractive, offering income and a buffer against equity swings. For example, high-quality global corporate bonds have delivered positive returns and diversification.’

 

This is a time to pay close attention to valuations and dividend income.