Exposures for today’s markets

The Short List: 2025 Investment directions
Product version: Spring & Summer
Speaker:
Karim Chedid
Head of EMEA Investment Strategy, Global Product Solutions

FOR PROFESSIONAL CLIENTS / QUALIFIED CLIENTS / QUALIFIED INVESTORS ONLY

Script:

(Text banner: Investment Directions for spring & summer 2025)
Hello and welcome to The Short List: a roundup of our highest-conviction ideas for spring and summer 2025 across equities, fixed income, portfolio diversifiers, and portfolio enhancers.
Heightened policy and economic uncertainty has weighed on investor, consumer and corporate sentiment since the start of the year, with a significant pickup in volatility at the start of Q2 amid trade policy uncertainty. Meanwhile diverging regional growth outlooks in the US and Europe have reignited stagflation fears.
Against this backdrop, we lean further into a selective approach across asset classes.
(Text banner: Equities: Favour selectivity via granular ETF exposures)
In equities, we favour selectivity via granular ETF exposures particularly in Europe, as a way to position for evolving winners and losers from global trade frictions.

(Text banner products on a scroll: BGF European Value Fund, iShares World Equity High Income UCITS ETF (WINC), iShares World Equity Factor Rotation Active UCITS ETF (FACT), BGF World Healthscience Fund)

We look to precision exposures like banks and industrials and seek to manage drawdown risk by diversifying through high income systematic active strategies, exposure to the quality and low volatility style factors, and defensive sectors like healthcare and utilities.
(Text banner: Fixed Income: Unconstrained approach to credit)
(Text banner products on a scroll: iShares € Flexible Income Bond Active UCITS ETF (IFLX), iShares iBonds Dec 2028 Term € Corp UCITS ETF (IB28), iShares $ TIPS 0-5 UCITS ETF (TIP5))

In fixed income, we favour an unconstrained approach to credit with a preference for active strategies as an uncertain global macro environment opens the door for greater dispersion across sectors and issuers. We continue to like fixed maturity products to lock in yields, as well as inflation linkers to manage US growth and inflation risks.
(Text banner: Portfolio diversifiers: Careful diversification is key)
(Text banner products on a scroll: BSF BlackRock Systematic US Equity Absolute Return Fund iShares Physical Gold ETC (IGLN), iShares AI Adopters & Applications UCITS ETF (AIAA), BlackRock Multi-Alternative Growth Fund)

In portfolio diversifiers, we think careful diversification is key in a regime of higher volatility and uncertainty and less reliable equity-bond correlations. Investors can take down broad market beta and replace with uncorrelated alpha risk through diversifying liquid alternatives. Gold has also stood out as a geopolitical diversifier over the past eighteen months.
(Text banner: Portfolio enhancers: building exposure to mega forces)
Finally, we look to enhance potential returns by building exposure to the mega forces we see reshaping global economies, like AI, as well as private markets. Reconfiguring portfolios to include private assets represent an opportunity to enhance risk-adjusted returns, and offer early access to these structural mega forces.
(Text banner: Investment Directions for spring & summer 2025)
Thank you for joining, and please see our latest Investment Directions report for more on these exposures.