Masttro Launches a New Wealth Management Platform

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Masttro announced on Monday the launch of its next-generation platform, establishing a new benchmark for more streamlined and robust wealth data management.

“The platform update arrives at a time of rising global asset valuations and increased complexity in wealth portfolios, as more asset owners are acquiring illiquid alternative investments,” states the press release accessed by Funds Society.

Family offices and wealth managers tasked with record-keeping and reporting often have limited visibility into asset management and performance unless they undertake significant manual data aggregation efforts, the firm noted.

This challenge is “further compounded by the need to support the massive generational wealth transfer—estimated at $84 trillion over the next two decades—to more tech-savvy owners who expect interactive, real-time views of their total wealth at the push of a button,” Masttro added.

“Masttro is committed to continuous innovation and to delivering first-class technology that enables our clients to better serve their UHNW clients. Our AI-driven platform is saving family offices and wealth management institutions enormous time and effort by providing asset owners with a comprehensive understanding of their portfolios and total net worth,” said Padman Perumal, CEO of Masttro.

Masttro’s next-generation platform introduces a component-based architecture that combines AI-driven automation with user-centered design to meet the demands of modern wealth management.

Key features of the new platform include:

  • Aggregation of liquid and illiquid assets, liabilities, and passion investments into a single interactive dashboard.
  • Advanced document extraction and data aggregation that eliminate manual processes, saving time and effort.
  • An API that allows Masttro’s datasets to integrate seamlessly with other systems, creating an optimized wealth management ecosystem.
  • Intuitive controls that enable firms to customize the platform, strengthening client relationships with tailored experiences.

As the platform continues to roll out, additional enhancements and new modules are expected to launch in early 2025, the firm concluded in its statement.

BlackRock Launches Europe’s First Actively Managed Regulated Money Market ETF

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BlackRock has introduced the iShares € Cash UCITS ETF (YCSH), a new actively managed ETF offering investors a way to manage their cash investments through a product designed to deliver money market-like returns.

According to BlackRock, the ETF combines the quality and liquidity of regulated money market funds (MMFs) with the convenience of the ETF format. Leveraging the expertise of its global cash management team, the fund actively manages cash in varying interest rate environments within a robust risk management framework.

As a key portfolio component, the fund provides access to highly rated short-term money market instruments, adhering to the stringent guidelines of the European Money Market Fund Regulation (MMFR), while offering clients the flexibility to meet their liquidity needs.

BlackRock highlights that extending MMF regulatory standards to the ETF ecosystem should enable a broader range of investors to actively manage their cash. “This product can be used to maximize the return on cash held in savings accounts, ETFs, or trading accounts, as well as by investors seeking a diversified cash investment tool as a complement or alternative to a standard bank account,” the firm stated.

The ETF allows individual investors, including those using digital investment platforms, to earn income through high credit-quality securities without minimum holding periods, and with investments starting from as little as €1.

“The YCSH combines the flexibility and accessibility of the ETF format, including continuous pricing and the ability to trade throughout the day, with the security of money market fund regulation. It’s an innovative solution for investors looking to get more out of their cash. This year, Europeans have shown significant interest in income investments, and YCSH expands the available options without requiring a fixed investment period,” said Jane Sloan, Head of Global Product Solutions for EMEA at BlackRock.

A dedicated team of money market portfolio managers will actively adjust the fund’s duration, credit exposures, and liquidity profiles to minimize volatility and ensure issuer diversification.

Beccy Milchem, Global Head of Cash Distribution and Head of International Cash Management, added: “Cash plays a critical role in a balanced investment strategy. We are pleased to bring BlackRock’s extensive expertise in active cash management to a wider range of investors through the convenience of ETFs. The demand for money market funds has grown in today’s high-interest-rate environment as investors look to actively manage their cash positions.”

With $849 billion in global assets under management in money market strategies, BlackRock International Cash Management ranks among the top three providers of MMFs. For nearly 50 years, BlackRock has delivered a variety of liquidity solutions tailored to the unique needs of each client across multiple interest rate cycles and market conditions.

This launch combines BlackRock’s leading expertise in cash management with the breadth and scale of the global leader in ETFs. The fund will be listed on Xetra with a total expense ratio (TER) of 0.10%.

Raymond James Financial Announces CEO Transition

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The Raymond James Financial Board of Directors announced the appointment of President Paul Shoukry to CEO of the company, effective February 20, 2025, completing the succession plan outlined in the March 2024 leadership announcement.

At that time, Chair and CEO Paul Reilly will step down from his CEO responsibilities and become Executive Chair.

“Paul Reilly and the rest of the board fully agree the time is right to move forward with our long-term succession process,” said Jeff Edwards, Lead Independent Director. “Paul Shoukry is a gifted leader who is exceptionally qualified to partner with our strong senior leadership team. I know that he will build on the firm’s remarkable track record and legacy of world-class client service that began with Bob and Tom James and has flourished under Paul Reilly’s leadership. We are pleased that Paul Reilly will remain as a full-time Executive Chair, similar to how Tom and Bob James executed and supported their succession plans.”

On the other hand, Reilly said: “Reflecting his understanding and commitment to all of our businesses, Paul Shoukry has spent the months since our leadership change announcement traveling, meeting with and listening to hundreds of financial advisors and associates across the country. He has also been involved in virtually every critical meeting and decision I have made during this time, and this has only reinforced our appreciation for the attributes that made him an ideal CEO candidate. His wisdom, insightful perspective and acute understanding of our business combine with a commitment to a business grounded in both excellent client and advisor service. With Paul and our proven leadership team, I couldn’t be more confident in the future of the company.”

In addition, Shoukry said: “Raymond James has an extraordinary history and has been built on time-tested values that we will always embrace. I am honored to have the trust and support of Paul, Tom James and the board and am excited about our future. My confidence in our outlook lies in our people – our leadership team, the financial advisors and associates who are all aligned on our mission of helping clients achieve their financial objectives.”

As part of the firm’s succession plans, Raymond James is announcing other key leadership changes and appointments. Jeff Dowdle has announced that he will be retiring and stepping down from the COO role at the end of the fiscal year.

As part of this change, Raymond James Financial Private Client Group President Scott Curtis will become COO of Raymond James Financial, current Raymond James & Associates CEO Tash Elwyn will become president of the Private Client Group, and Global Equities & Investment Banking President Jim Bunn will become president of the Capital Markets segment.

These changes will be effective October 1, 2024, at which time Dowdle will be named vice chair and serve in an advisory role to facilitate a smooth transition.

In Europe, From January to October, ETFs Attracted $207.79 Billion, Surpassing the 2021 Record

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According to the latest report from ETFGI, an independent research firm, the ETF market is on track to break all records, as demonstrated by October’s flows. During the first ten months of the year, ETFs captured $207.79 billion, surpassing the record set in 2021 with inflows of $193.46 billion. In terms of leadership, the Xtrackers S&P 500 Equal Weight UCITS ETF (DR) – 1C (XDEW GY) gathered $1.73 billion, the largest individual net inflow.

“The S&P 500 index fell by 0.91% in October but rose by 20.97% in 2024. The developed markets index, excluding the U.S., dropped by 5.22% in October but rose by 6.65% year-to-date in 2024. The Netherlands (-10.20%) and Portugal (-8.24%) recorded the largest declines among developed markets in October. The emerging markets index fell by 3.78% in October but rose by 14.93% year-over-year in 2024. Greece (-8.66%) and Poland (-8.18%) experienced the largest declines among emerging markets in October,” highlighted Deborah Fuhr, managing partner, founder, and owner of ETFGI.

Regarding the behavior of flows in October alone, the report indicates that $31.55 billion in inflows were recorded. By asset type, equity ETFs attracted $22.42 billion, bringing year-to-date inflows to $144.69 billion, significantly above the same figure for 2023. In the case of fixed income, ETFs attracted $6.18 billion in October, with year-to-date net inflows reaching $53.12 billion, “slightly above the $51.63 billion in year-to-date net inflows in 2023,” according to the report.

In the case of commodity ETFs, these recorded inflows of $385.46 million in October, bringing year-to-date net outflows to $4.51 billion, below the $4.79 billion in year-to-date net outflows in 2023. “Active ETFs attracted net inflows of $2.68 billion during the month, bringing year-to-date net inflows to $14.66 billion, above the $6.19 billion in year-to-date net inflows in 2023,” it highlights.

A significant fact is that, by the end of October, the European ETF sector comprised 3,109 products, 12,744 listings, and $2.22 trillion in assets. These $2.22 trillion came from 105 providers listed on 29 exchanges in 24 countries.

 

2024: The Year of Gold

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As 2024 enters its final stretch, the international price of gold has risen by approximately 24% year-to-date (YTD), primarily driven by sustained demand from a specific group of central banks, according to a report by Credicorp Research authored by Daniel Velandia, CFA, and Diego Camacho Álvarez.

Record High Prices

By the end of October 2024, the international price of a troy ounce of gold temporarily surpassed $2,750, marking around nine months of sustained growth and a 30% YTD increase.

While this dynamic suggested an uninterrupted trend of new highs, experts pointed out that a more appropriate analysis would consider prices adjusted for inflation via the Consumer Price Index (CPI). Gold’s advocates as an investment and diversification asset emphasize its principal virtue as a true hedge against the monetary exuberance of the global economy.

When accounting for the inflation effect, the rise in gold prices throughout the year is significant but still falls short of a new historical high. Instead, in real terms, the price has recently reached a critical resistance level last observed in 1980 and 2011. Considering the international turmoil tied to persistent geopolitical tensions and, more recently, the results of the U.S. elections, this distinction is valuable for making portfolio diversification decisions.

The 2008 Crisis, Basel III, and Gold Demand

The implementation of the Basel III agreements has had a notable but often overlooked impact on gold prices. While the initiative aims to strengthen regulatory standards and curb risk-taking in the banking sector, it also seeks to limit speculation in derivative markets where gold serves as the underlying asset.

The 2008 financial crisis exposed vulnerabilities in the fractional banking system. In response, Basel III identified that investment funds, futures contracts, ETFs, and other instruments linked to gold—but not necessarily backed by physical gold—essentially replicate the speculative model based on fiat money. The new regulations aim to restrict or eliminate this practice.

Under Basel III, physical gold has been reclassified as a Tier 1 asset, reserved for the safest and most liquid assets, such as cash and high-quality government bonds. This represents a significant shift in how banks consider and manage gold on their balance sheets. Prior to Basel III, gold was classified as a Tier 3 asset, characterized by higher risk and lower liquidity. The new regulations also mandate financial institutions to maintain 85% capital buffers—up from 0%—to ensure the financing and clearing operations for precious metals.

The Net Stable Funding Ratio (NSFR), another key component of Basel III reforms, requires banks to maintain a balance between long-term assets and liabilities to ensure financial stability. Regarding gold, the NSFR makes a critical distinction between physical gold and gold-backed instruments like paper gold. According to these rules, derivative-based assets can only be weighted at 85% of their market value for NSFR purposes. This classification deems these instruments less secure and less liquid than physical gold, encouraging banks to reduce exposure to derivatives and increase reliance on physical gold to strengthen their balance sheets.

This differentiation between physical gold and gold derivatives has profound implications for the market, fostering a shift toward greater use of gold as a secure and liquid asset in financial systems.

Geopolitics and Reserve Assets

According to data from the World Gold Council (WGC), central bank demand is a key driver of the strong advance in gold prices. While some central banks seek alternatives to minimize the impact of U.S. economic sanctions, others argue that, amid the fiscal and monetary challenges faced by developed economies, gold remains one of the world’s most important reserve assets.

In both cases, the war in Ukraine has played a decisive role. Between 2010 and 2021, annual central bank demand averaged 470 tons. In 2022, this figure rose to 1,082 tons, followed by 1,030 tons in 2023. In the first nine months of 2024, demand reached 694 tons. Analyzing this dynamic requires precision regarding the data structure and consideration of the varied motivations among central banks.

Russia and China Lead the BRICs

Central banks in Russia and China, along with authorities in Saudi Arabia and several sovereign wealth funds (SWFs), top the list of institutional buyers involved in undisclosed gold purchases. According to WGC data, by Q3 2024, Russia held 2,335 tons of gold, an increase of 1,913 tons since Q3 2000. Relative to the size of its economy, Russia has the largest gold reserves. China, meanwhile, is estimated to hold 2,264 tons, up from 395 tons in 2000. Given their strategic competition with the U.S., both nations are expected to remain regular gold buyers, albeit without disclosing full information.

The Visegrad Group and Central Europe

The Visegrad Group, comprising Czech Republic, Hungary, Poland, and Slovakia, collaborates on shared interests within European integration. Specifically, Poland, Hungary, and the Czech Republic have been increasing their gold reserves. This accumulation is seen as a strategic measure against economic uncertainty, for value preservation, diversification, and to address rising geopolitical risks.

Among these, Poland stands out for its expanded production capacity and emergence as a strategic regional player. Polish authorities have significantly increased defense spending, with analysts suggesting that Poland is poised to develop one of Europe’s most dynamic economies, robust military forces, and strong gold-centered international reserves. Poland now holds 377 tons of gold, surpassing Saudi Arabia (323 tons) and the United Kingdom (310 tons).

Other Players

While major European economies have been net sellers of gold this century, nations like Turkey, India, and several Central Asian countries (former Soviet states) have publicly announced intentions to increase their gold holdings. Turkey holds 595 tons, while India’s reserves are estimated at 854 tons.

Central Bank Survey and Final Considerations

The latest central bank survey conducted by the WGC indicates growing recognition of gold’s monetary characteristics in discussions on international reserve consolidation. While respondents expect moderate increases in gold reserves over the next five years, this is not seen as a complete replacement of the U.S. dollar as the global system’s anchor.

In conclusion, the complexity of today’s international landscape and the emergence of new economic blocs will sustain demand for gold as a reserve asset. However, investors should be cautious of market risks following this year’s significant appreciation. For those with suitable risk profiles, potential price corrections could provide opportunities for portfolio diversification.

Bitcoin’s Highs Highlight Investors’ Main Concern: Crypto Asset Custody

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Cryptocurrency investors are ending the year with euphoria. Bitcoin began the week surpassing $98,000, edging closer to the pivotal $100,000 mark. According to experts, the decisive election of Donald Trump as the 47th president of the United States has reduced uncertainty, eliminating a major source of instability.

“As a result, one of the largest economies in the world, the United States, is now poised to implement liberal and crypto-friendly regulation, representing a significant step forward,” says Mireya Fernández, Country Lead for Bitpanda in Southern Europe and CEE.

Fernández highlights positive developments in recent years, including increased adoption of digital assets by retail investors, crypto market regulation in Europe, central bank interest rate cuts, and the integration of cryptocurrencies into traditional financial systems and banking portfolios. “The market is eager, and prices continue to trend upward. Bitcoin reaching $100,000 is not just a number but a genuine turning point for the crypto sector,” she adds.

Market Fundamentals

Manuel Villegas, Digital Asset Analyst at Julius Baer, notes that Bitcoin’s strong prices, currently hovering near $90,000, are backed by solid fundamentals. “Demand for spot products, positions in derivatives, and corporate intentions to add Bitcoin to treasury reserves are key factors shaping this scenario. While volatility is likely in the future, the current demand base is solid, suggesting this trend could persist. We see few significant short-term obstacles for Bitcoin,” says Villegas.

Custody Concerns

Bitcoin’s impressive performance underscores a key concern for investors, particularly institutional ones: custody. A survey by Nickel Digital Asset Management of institutional investors and wealth managers from the U.S., UK, Germany, Switzerland, Singapore, Brazil, and the UAE, managing a combined $800 billion in assets, found custody to be a bigger issue than volatility.

The survey asked participants to rank six barriers to investing in digital assets. The lack of centralized authority ranked as the second-largest barrier, followed by ESG issues and market manipulation risks. Regulatory uncertainty was ranked sixth and considered the least significant.

A notable 97% of respondents stated that backing from a major traditional financial institution is essential before considering investments in any digital asset fund or vehicle. Recent volatility has also encouraged skeptics: 19% strongly agree that price dislocations have presented solid opportunities for initial investments or increased allocations, with another 76% somewhat agreeing.

Anatoly Crachilov, CEO and Co-Founder of Nickel Digital, notes: “The industry has made significant progress in mitigating custody and counterparty risks through the adoption of off-exchange settlement solutions—an advanced form of digital asset custody—in recent years. However, this knowledge seems limited outside the native digital community. The close involvement and broad support of major traditional financial institutions are crucial for many investors, making the increased participation of BlackRock and Fidelity a very welcome development.”

New Developments

Investors are witnessing fresh advancements. According to Villegas, beyond expectations of regulatory and legislative improvements in the U.S., optimism has been fueled by Trump’s recent appointments, announcements of new agencies like the Department of Government Efficiency (DOGE), and corporate reserves. These factors, he says, have driven markets to “put their money where their mouth is,” with prices well-supported by spot demand.

On November 15, the Commodity Futures Trading Commission (CFTC) approved asset managers’ applications for options on some spot Bitcoin ETFs in the U.S., granting investors enhanced tools to hedge against directional risks or speculate further on Bitcoin’s price performance. “These derivatives should begin trading soon. Looking ahead, volatility is likely. Prices are high, and the market is relatively overextended, but with a strong demand base, this trend could continue. We see few significant short-term obstacles for Bitcoin,” concludes the Julius Baer analyst.

WisdomTree Launches a Physically-Backed XRP Cryptocurrency ETP

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WisdomTree, a global provider of financial products, has announced the launch of its latest cryptocurrency exchange-traded product (ETP). The WisdomTree Physical XRP ETP (XRPW) is listed on Deutsche Börse Xetra, the Swiss SIX Exchange, and the Euronext exchanges in Paris and Amsterdam with a management expense ratio of 0.50%, making it the lowest-cost ETP in Europe offering exposure to XRP.

The fund is designed to provide investors with a “simple, secure, and cost-efficient” way to gain exposure to the price of XRP. It is fully backed by XRP, “offering exposure to the spot price of XRP through an institutional-grade, physically backed structure.” Investors will also benefit from a dual custody model with regulated custodians and the underlying assets professionally secured in “cold storage.”

Regarding this cryptocurrency, the fund manager explains: “XRP is a native digital asset of the XRP Ledger (XRPL), a decentralized, permissionless, and open-source blockchain. XRPL uses a Proof-of-Association (PoA) consensus mechanism operated by universities, exchanges, businesses, and individuals to validate transactions. This system is more efficient than Proof-of-Work (PoW), as it requires less hardware resources and consumes less energy.

Created in 2012 specifically for payments, XRP can settle transactions on the ledger in 3-5 seconds and was designed to be a faster and more sustainable alternative to Bitcoin. XRP can be sent directly without a central intermediary, making it a convenient tool for bridging two different currencies quickly and efficiently. It is freely traded on the open market and is used in real-world applications to enable cross-border payments and microtransactions.”

Following this launch, Dovile Silenskyte, Head of Digital Asset Analysis at WisdomTree, suggests that with increasing risk appetite, exposure to altcoins like XRP could outperform a standard Bitcoin and Ether allocation. In her view, XRP can be considered alongside these megacaps in a multi-asset portfolio to reduce exposure to a single token. “Cryptocurrencies represent more than 1% of the market portfolio and should therefore be part of a comprehensive investment strategy. As an asset class with low correlation to traditional asset classes, cryptocurrencies can help increase diversification and potentially improve risk-adjusted returns in a multi-asset portfolio,” Silenskyte adds.

Meanwhile, Alexis Marinof, Head of Europe at WisdomTree, highlighted: “This new launch complements our existing range of physically backed cryptocurrency ETPs, offering investors another solution to enhance their multi-asset portfolios. Cryptocurrency ETPs are an effective way to keep investors within a regulated framework and are becoming the preferred vehicle for accessing cryptocurrencies. WisdomTree has 20 years of experience in providing and managing physically backed ETPs for institutional investors. With over $100 billion in assets under management globally across ETFs and ETPs, investors in our cryptocurrency ETPs can benefit from our global reach, scale, and resources.”

José García Joins UBS Wealth Management in Miami

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UBS Wealth Management has announced that José García has joined the firm as a financial advisor in South Florida.

He joins the UBS Miami Wealth Management market, led by Brad Rosenberg, and will be based in the downtown Miami office. García will be part of the VPHN Wealth Partners advisory team at UBS, headed by UBS private wealth managers Melissa Van Putten-Henderson and Doris Neyra. The Private Wealth team joined UBS in 2021 from Wells Fargo.

“José brings a deep understanding of clients’ complex needs and a strong commitment to helping them achieve their financial goals,” said Brad Rosenberg, Market Director of UBS Private Wealth Management for Greater Miami.

Before joining UBS, García served as a senior investment manager at Wells Fargo Private Bank, managing over $500 million in client assets. He developed investment portfolios and fostered long-lasting relationships with high-net-worth and ultra-high-net-worth clients to help them meet their wealth management objectives.

Previously, he also worked at BNY Mellon, where he “gained additional experience in customized client solutions and wealth management,” the text notes.

García holds a bachelor’s degree in Finance from the Honors College at Florida International University and an MBA from the University of Florida.

The Known, the Unknown, and the Unknowable Will Shape the Commodities Market in 2025

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The reelection of Donald Trump as president of the United States had a notable impact on commodities markets, with significant declines driven by a stronger dollar and investor repositioning. According to Marcus Garvey, Head of Commodities Strategy at Macquarie, uncertainty surrounding trade and tariff policies is affecting global growth projections. Additionally, inflation and geopolitical risk may continue to influence the prices of assets like gold and oil. “Supply and demand for commodities will remain heavily influenced by macroeconomic factors beyond specific policies,” Garvey notes.In its latest report, Macquarie suggests that the initial sell-off in commodities following Trump’s reelection was likely a knee-jerk reaction to the pronounced strength of the U.S. dollar. The Bloomberg Commodity Index (BCOM) closed the day down approximately 1%.Investor Positioning and Market Dynamics

Garvey highlights how investor positioning played a role in the market’s movements. For example, zinc, which had significant long positions, saw a nearly 5% decline, while Brent crude, heavily shorted, recovered somewhat to close with a loss of less than 1%. “Subsequent recovery aligned with a slight easing of the dollar and outperformance in the markets initially hit hardest,” he adds.While short-term commodity price fluctuations often move inversely to the strength of the dollar, Garvey stresses the importance of distinguishing between causation and correlation. “Exchange rate fluctuations alone are not definitive drivers of commodity price changes—note that the relationship between the dollar and commodity prices has been inverted for much of the past three years. The underlying macroeconomic factors are what truly matter,” he explains.Risks of Stagflation and Global Slowdown

Macquarie economists predict that the combination of higher tariffs, large and growing deficits (due to tax cuts), and reduced immigration (through deportation of undocumented immigrants) could likely slow growth and raise inflation, potentially leading to stagflation by late 2025.They also warn that a 60% tariff on all Chinese imports, combined with broader trade restrictions, could reduce China’s exports by 8 percentage points and its GDP by 2 percentage points by 2025.This global slowdown, they argue, would be bearish for overall commodity price trends, exacerbated by the bullish implications for the U.S. dollar. “While commodities are often considered an inflation hedge, this scenario—where inflation is not driven by strong demand growth or a negative commodity supply shock—would make it difficult for them to fulfill that role,” Macquarie argues.Policy Uncertainty and Commodity Sensitivity

Macquarie warns that the specifics and implementation mechanisms of tariffs remain unclear, as does the extent to which Chinese authorities may counteract their impact by boosting domestic demand. They point to corporate debt growth and monetary supply expansion as key signals to monitor for the effectiveness of monetary easing in China.In the U.S., the experts suggest that before Trump’s policies take effect, commodity prices will likely react to headlines. The high degree of uncertainty makes it exceptionally difficult for markets to price in a specific outcome. “This could amplify the impact of current favorable conditions—China’s initial monetary easing gaining traction in industrial activity, real wage growth in developed markets supporting consumption, and the strong performance of other risk assets—lifting prices in early 2025. The net effects on global growth will only become apparent afterward,” Macquarie economists add.Oil and Geopolitical Risks

Regarding oil, Macquarie sees Trump’s “drill, baby, drill” policy unlikely to significantly accelerate crude production but suggests it could marginally increase investor appetite for oil and gas.Given already high levels of activity—daily production has increased by 1 million barrels since 2019 and 2 million barrels since the 2020 pandemic lows—supply is expected to continue responding to prices rather than policies.However, geopolitical tensions under Trump’s second administration could result in supply-side surprises. “In both the Middle East and in relation to Russia’s invasion of Ukraine, scenarios exist where the currently discounted risk of supply disruptions could materialize,” the Macquarie economists warn.Gold: A Hedge Against Uncertainty

While gold’s geopolitical uncertainty boost tends to be short-lived, Macquarie identifies two key drivers that could push prices higher despite dollar strength. Chinese Investors: If Chinese investors use gold to hedge against currency devaluation risks, it could diminish the sensitivity of Western investors to the opportunity cost of holding a zero-yield asset with zero credit risk. Safe-Haven Appeal: Reduced sensitivity to these costs could solidify gold’s role as a crucial hedge in uncertain economic environments.
“Gold’s unique position as a zero-yield but zero-credit-risk asset is critical in this context,” Macquarie concludes.

 

Innovation, More Flexible Monetary Policy, and Increased Capital Investment Will Drive Economies and Markets in 2025

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innovation monetary policy capital investment 2025

“As we approach the end of the year and look towards 2025, the economic horizon presents a mix of opportunities and challenges.” With this phrase, JP Morgan Private Banking begins its outlook report. It highlights how advancements in artificial intelligence and innovation, along with more flexible global monetary policies and increased capital investment, could continue to drive economies and markets. “We believe that by adding diversification and generating income, clients can strengthen their portfolios to respond to an evolving economic environment. Our ultimate goal is to build resilient portfolios that not only align with our core market outlook but can also withstand various risk scenarios,” says Adam Tejpau, Chief Executive Officer, International Private Bank, JP Morgan.

The entity’s balance is clear: 2024 has been a year in which markets have performed exceptionally. According to their view, the year was characterized by a decrease in inflation, relaxation of monetary policy, and strong growth in GDP and corporate profits. Looking ahead to 2025, investors are ready to capitalize on this market strength.

In this regard, they believe that with new investment options, such as evergreen alternative funds, the acceleration of capital investment, and transformative topics like artificial intelligence, investors are poised to capitalize on emerging trends that could continue to drive the economy and markets. “Our ultimate goal is to build resilient portfolios through income generation and diversification, which can help mitigate the impact of unexpected disruptions,” says Grace Peters, Global Head of Investment Strategy at JP Morgan Private Banking.

To leverage the strong foundation created by market gains in 2024, their outlook report identifies five key themes. The first is the consideration that the global monetary policy relaxation should boost economic growth. According to their view, it is expected that the monetary policy easing cycle will continue next year, with declining interest rates supporting economic growth in the U.S. and the Eurozone, without significantly boosting demand or reigniting inflation.

“In the U.S., the bond market’s valuation implies a relaxation cycle ending in the first quarter of 2026, with the official interest rate near 3.5%. This provides a favorable environment for risk assets, benefiting sectors like housing, commercial real estate, and productivity, while also fostering an emerging revival of trading,” says Jacob Manoukian, Head of Investment Strategy for the U.S. at JP Morgan.

The second key theme identified is that capital investment is a megatrend driving the future. The entity believes that with high margins, growing profits, increased confidence from executives, and policymakers focused on supporting growth, companies and governments are ready to spend. Capital investment will be a major driver for three global trends: artificial intelligence, energy infrastructure, and security.

“We anticipate an increase in capital investment in the energy sector, driven by the reindustrialization of U.S. manufacturing capacity, the rise of electrification with clean energy solutions, and the growing demand for energy from data centers. This strong investment scenario is not limited to the U.S. Japan is at the forefront of many of these structural trends, and we see that, as a result, capital investment is increasing,” says Alex Wolf, Head of Investment Strategy for Asia at JP Morgan.

Third, the entity sees that European global giants offer resilience and profitability opportunities. According to Erik Wytenus, Head of Investment Strategy for JP Morgan Private Banking for Europe, the Middle East, and Africa, despite the productivity challenges Europe faces, investors should not overlook large European companies in 2025. “It’s important to remember that the 50 largest European companies earn approximately only 40% of their revenues from Europe, making these ‘national champions’ in this group true global players. While the ‘American exceptionalism’ has solid fundamentals, we also advocate for complementing U.S. positions with international diversification, including in Europe, which is benefiting from the monetary policy easing driven by the ECB,” argues Wytenus. For this expert, investors can continue to improve the resilience of their portfolios by considering real assets and income streams to better withstand unexpected disruptions.

Fourth, they emphasize that it will be crucial to take advantage of the frontiers of innovative investment in alternatives. “In the investment world, innovation sometimes comes in waves; we believe 2025 will see a surge in innovation as the sector explores new areas like evergreen alternative funds, sports, space, and urban development. Open-ended, indefinite-duration alternative funds (evergreen) are gaining popularity. In 2024, half of our commitments to alternatives will be in such structures, three times more than in 2023. These new strategies and investment opportunities, though not the core of portfolios, offer growth potential and diversification in a rapidly changing world,” adds Kennedy.

Finally, the entity considers it essential to focus on political impact over electoral outcomes. Following this year’s electoral results, which highlighted the power of anti-establishment movements, many investors are thinking about sovereign debt and deficits. However, investors’ attention should now shift from electoral outcomes to the impact of policies on the economic and investment landscape. “Latin America was at the forefront of the global monetary policy easing cycle, which has helped sustain growth and economic activity throughout the region. However, ‘fiscal activism’ from governments may unanchor inflation expectations and disrupt monetary efforts, posing a risk to the expansionary cycle,” comments Nur Cristiani, Head of Investment Strategy for JP Morgan in Latin America.

In Cristiani’s opinion, in the context of global changes in government power, investors must watch the risks posed by anti-establishment politicians. “Beyond right and left, the rise of anti-establishment parties could increase political and economic volatility, which strengthens the need for resilient investment portfolios,” he concludes.