Global Investment Outlook 2025

The global equity market is poised to offer a multitude of opportunities alongside multiple levels of risk. Investors who can effectively navigate the complexities of geopolitical dynamics, technological advancements, and economic variables that are likely to find viable investment opportunities across various sectors. We expect the US market (S&P 500 Index) to give a more normalized return, ranging between 5% and 10% in 2025, as against around 29% return in 2024. However, navigating uncertainties (risks) arising from new policies of Trump administration holds the key.

Last year, we wrote “Heading into 2024, the yield on the EM bond index is 7.5%, comfortably above its long-term average, providing the potential for equity-like returns.” Our forecast turned out quite well with global EM bonds returning 8% last year. Coupon income is high, the growth and inflation mix is favorable, and central banks to start the year in an easing mode. The backdrop appears conducive for global EM bonds to deliver mid-single-digit returns in 2025.