By
Kimberly LaPointe
13 January 2025
Outlook 2025: Planning for growth and embracing change
We are coming off another great year for investors. In 2024, the global economy showed impressive strength, with the classic 60/40 portfolio1 delivering an outstanding 18.5% return, following a 13.3% return in 2023.2 However, every advisor knows that investors are never content with “more of the same.”
After another resilient year for the US economy, we look ahead to the new year. While policy could be unpredictable and volatility may be ongoing, 2025 is expected to be characterized by strong global growth.
With this in mind, as investors look to prepare their portfolios, our team shares a few key themes to be considered:
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Empower the future of energy and infrastructure. The surging demand for electricity, driven by changing demographics, widespread electrification, and rapid digitalization presents significant investment opportunities in both public and private sectors.
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Find growth in emerging markets. Capture growth by diversifying into emerging markets (EM). Allocations to EM equities offer attractive valuations and potential long-term growth driven by industrialization, urbanization, and a burgeoning middle class.
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Seek intentional alpha in large-cap equities. Concentration risk may be looming. Investors may be able to mitigate risk by diversifying their large-cap equity exposure in 2025, seeking true alpha drivers and exploring returns beyond mega-cap stocks, leveraging the expertise of skilled active managers.
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Capitalize on the yield opportunity. With policy shifts and elevated bond yields in 2025, investors may want to consider reallocating out of cash to capture higher yields, balancing opportunities and risks with the help of a skilled active manager that focuses on sustainable yield opportunities.
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Re-examine small-caps. With stronger earnings growth projected and potential for additional interest rate cuts on the horizon, small-cap stocks are well positioned to deliver substantial growth. In addition to diversification benefits, many small-cap stocks are trading at attractive valuations, making them a potentially attractive entry point for investors.
As we enter 2025, Macquarie Asset Management is marking a new period of growth for our US business. We are consolidating our investment capabilities under a single name, Macquarie, replacing our legacy Central Park Group, Delaware, and Ivy brands. This transition underscores our commitment to delivering superior long-term results for our clients and unites our strength in public markets, Macquarie’s deep heritage in infrastructure, and our industry - leading alternatives capabilities.
“Out with the old and in with the new” is never easy – whether it's turning the calendar, re-evaluating an investment strategy, or transitioning to a single brand name. However, when supported by global capabilities, strong personnel, and platform expertise, and most importantly, an unwavering focus on delivering client results, such shifts can be game changing.
1. Portfolio consisting of 60% equities (represented by the S&P 500® Index) and 40% bonds (represented by 10-year US Treasurys).
2. Based on Robert Shiller online data, through December 31, 2024.
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