Natixis Investment Managers has positive outlooks for fixed income and stock markets in 2025. In fixed income, to weather the volatility generated by uncertainty regarding rate cuts, Managers must carry out active management, and return to the stock picking, According to Javier García de Vinuesa, Country Head of Natixis IM for Spain. “We are going to see many rises and falls of the tide, and it will come to light who was wearing the swimsuit and who was not,” he said. The firm prefers corporate bonds over sovereign bonds.
With regard to equities, the United States is the priority market to be in, and the entity sees opportunities to diversify that allocation to the US market, now very concentrated in large caps, taking exposure to mid-cap companies, which are better positioned for next year. This was explained by Mabrouk Chetouane, head of global market strategy at Natixis IM Solutions.
US mid-sized listed companies have better profit growth prospects than large and small companies for 2025 and 2026: The expected increase in profits in the S&P Mid Cap is close to 20% for both yearscompared to 14% and 13% in the S&P 500; and the profit multiplier of small and medium-sized companies is 17 times, compared to 22 times for large listed companies. Regarding smaller companies, the key is in the active selection of securities, since passive management is quite “inefficient” in this segment, according to Carmen Olds, director of Advisory for Spain and Latin America at Natixis IM. Solutions. For his part, Chetouane explained that what is foreseeable is that we will return to a normal situation, in which falling rates will support the mid and small caps.
The head of global market strategy at Natixis IM Solutions alluded to the fact that we are seeing a decoupling of the markets: of the US versus Europe, and of emerging markets versus developed ones, with the measures announced by the future president of the United States, Donald Trump, putting pressure on the emerging space. Still, Mabrouk Chetouane emphasized that although we have it in our heads that tariffs immediately translate into more inflation, this is not the case; and the increase in tariffs may not be so abrupt, he warned. Nor would he be surprised if the euro continued to depreciate to absorb the effect of these measures.
By sector, a Natixis IM survey among institutional investors revealed that they continue to believe that technology has the greatest potential, although they also highlight the health sector. As for emerging markets, the opportunities are outside China.
In 2025, an opportunity will also open in alternatives“which allow portfolios to be diversified, providing sources of return uncorrelated with the market that help reduce volatility,” explained Carmen Olds. “We see, on the part of institutional investors, a willingness to increase the weight of alternatives, especially with regard to the private equitybut also in private debt and real estate, where rate cuts will boost valuations.” That weight could grow – it is currently in the low single digits in retail portfolios – until reaching up to 20% in the future.
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