Quarterly Investment Report – February 2025

Crossroads

As we move through the first quarter of 2025, financial markets remain at an interesting crossroads – supported by economic resilience yet facing risks that could test investor confidence.

Below is a summary of our latest insights and a video from Advisory Board member Daryl Wilson on our positioning for the year ahead.

Summary of latest insights

• Positive Momentum – On the positive side, economic growth, particularly in the US, continues to hold firm. Inflation is moderating, corporate earnings remain strong, and central banks are gradually easing monetary policy. These factors provide a supportive backdrop for markets in the short to medium term.

• Headwinds Building – However, risks remain. Equity valuations are at record highs, which may not be sustainable if growth expectations falter. Policy uncertainty in the US – especially around trade and fiscal measures – adds complexity, while central banks remain cautious about cutting rates too aggressively and reigniting inflation.

• Long-Term Strategy is Key – A strategic, long-term investment approach is key in uncertain times. History has shown that even in periods of volatility, markets can deliver strong returns over time. A diversified portfolio across asset classes, regions, and sectors remains critical to balancing growth and risk.
  

• Asset Allocation Change – This quarter, we are increasing global currency hedging amid AUD devaluation, adding a new position in listed global property to capitalise on rate shifts, and maintaining an overweight position in private credit due to attractive yields.

^{General Advice Warning: Any comments in this communication do not consider your objectives, financial situation or needs. Before acting on any general advice, consider whether it is appropriate for you.}