Highlights: While the global economy is weakening a bit, it is still resilient, thanks to innovation lifting productivity and investment. In many economies, consumers are benefiting from real wage growth as inflation has eased. And in China, we believe there was an important pivot towards a friendlier and more supportive stance to the private sector. This should boost Chinese business confidence and investment, with positive spillover effects to the rest of the economy.

• In this context, the global economy should be able to weather tariffs and more complex international relations. We do not think that tariffs will lead to stagflation, as some trade can be reoriented and services are largely unaffected. Tariffs may also be up for negotiation, and to the extent they do apply, some of the revenue may be used to finance US tax cuts
• The resilience of the economy and the rapid innovation mean that we maintain our risk-on approach, with a continued overweight on US stocks. We upgraded Chinese equities to overweight in February and further diversify with overweights in Japan, India, Singapore and the UAE
• Tariffs do lead us to make some tweaks to our strategy however. On the positive side, we think tariffs will cause foreign companies to invest more in the US, supporting our North American Re-Industrialisation theme. However, we are selective in the consumer space and are underweight on materials as we think these sectors can be more affected than others. Around the world, consumer preferences may continue to shift towards local brands. And to manage tail risks, we maintain our overweight on gold