Q1 2025 was marked by a sharp rise in volatility (+50%), driven by geopolitical tensions, erratic U.S. trade policies, and sector rotations, especially out of U.S. tech. The “Magnificent 7” tech giants dragged the S&P 500 and Nasdaq into negative territory, despite relative strength in other U.S. stocks. Meanwhile, Europe, the UK, and China outperformed, with European defence spending and Chinese tech growth attracting capital. This shift highlights a major rotation away from U.S. dominance and underlines the importance of global diversification to which active managers have been advocating.
TAM’s entire portfolio range benefited from broad global exposure and reduced U.S. tech reliance, outperforming via a more diversified portfolio of equities, bonds and quality alternative assets which helped to offset some of the negative performance from the US market.
Looking ahead, TAM expects continued volatility, with potential U.S. market stabilization tied to earnings and policy shifts. Europe and emerging markets remain strong opportunities, while bonds and alternatives (e.g., precious metals, volatility strategies) offer diversification and downside protection which will remain a key hallmark of a properly diversified investment strategy in 2025.
TAM remains focused on long-term value, using current dislocations to selectively position for future gains. Strategic diversification across regions and asset classes is central to navigating an uncertain yet opportunity-rich environment which for the first time in a number of years focuses on global stocks rather than a small handful of large US Tech stocks.
For our full review of Q1 2025, and an insight into our current positioning and strategy for Q2 2025, just click below.
If you would like to speak with us about this update, or to discuss our discretionary investment management services in general, please get in touch.
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Quarterly Market Update Q2 2025