All asset classes delivered strong returns during 2024. In 2025, we expect positive but lower returns, with smaller differences between asset classes. We will continue to maintain a well-diversified portfolio with some overweight in equities and an underweight in fixed income investments and hedge funds.

"We expect profits to climb during 2025 and more companies to contribute to this. The chance of a more even distribution of returns among different types of companies and regions has increased. This would help create a more stable and long-lasting upward stock market trend," says Fredrik Öberg, Chief Investment Officer at SEB's Private Wealth Management & Family Office Division.

Our market view 
Our forecast for 2025 is that the global economy will continue to grow at roughly the same pace and that lower key interest rates will boost the more cyclical part of the global economy. This will enable a broader distribution of earnings among regions and sectors and between large and small companies. We expect positive returns, although we do not anticipate any additional potential via the valuation parameter since it currently shows higher P/E ratios than historical averages, though with wide gaps, and credit spreads are compressed.

Our portfolio
We still have an overweight in US equities and are highlighting Swedish equities as another attractive position. Among fixed income investments, we have long durations and an overweight in investment grade bonds, while toning down high yield bonds. Our hedge fund portfolio reflects low covariance with equities and corporate bonds. As always, illiquid alternative investments are an attractive asset class that should be combined with the liquid assets above. 

Theme articles
This February 2025 edition of Investment Outlook also includes two newsworthy theme articles:
·     Water - new investment cycle is here
·     Argentina - an economy in transition

You will find the full report, plus a video, at www.seb.se/investmentoutlookreport.