Standard Chartered Bank is advising investors to take advantage of potential market volatility in the second half of 2025 to build positions that align with its key investment themes. The bank’s investment strategy is based on three core principles: overweighting global equities with a focus on Asia ex-Japan, favoring a weak US dollar, and incorporating portfolio diversifiers such as gold and alternative strategies.
Despite the potential for market jitters due to the upcoming expiry of President Trump’s trade truce, Standard Chartered views any volatility as a tactical opportunity to reinforce its investment themes. The bank notes that previous crises in 2025 have not had a lasting impact on financial markets, with global equities rising over 9% in the second quarter despite a significant sell-off earlier in the year.
Standard Chartered is advocating for diversified global equity exposure, with a tilt towards Asia ex-Japan. The bank’s quantitative models show bullish signals for Japanese and UK equities, in addition to US markets, and it expects major equity markets to re-test and set new highs. The bank maintains an overweight stance on Asia ex-Japan equities, led by China, and also favors Euro area equities and the industrial sector in Europe.
In the bond market, Standard Chartered suggests adding to both US and Emerging Market bonds on pullbacks. The bank advises waiting for a rebound in US bond yields before adding further, and favors the 5-7 year maturity profile. It also remains bullish on US inflation-protected bonds (TIPS) as a hedge against inflation worries. For non-USD bonds, the bank recommends adding to Emerging Market local currency bonds on pullbacks, once investor positioning cools down.
The bank’s overall strategy is to ease into equities and other preferred assets, especially on any tariff-related volatility. It anticipates that trade-related uncertainty will maintain pressure on the US dollar, and any resulting volatility should be viewed as an opportunity to add to its investment themes. By leveraging potential market volatility, investors can build positions that align with Standard Chartered’s key investment themes and take advantage of opportunities in global equities, bonds, and other assets.