Investment Clock position

As at May 2025. Trail shows monthly readings based on global growth and inflation indicators. Yellow dot is the current reading.

Source: Royal London Asset Management. For illustrative purposes only.

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May 2025

No such thing as passive in multi asset

Our strategic asset mix aims to maximise growth for a given level of risk by diversifying across real assets, inflation hedges and more defensive fixed income and cash holdings. We seek to add value on a day to day basis through tactical asset allocation and active security selection.

Reducing risk amid elevated uncertainty

Trump’s tariff shock triggered a market slump and fears of recession. We were correctly underweight US equities, but other markets were also hit. With sentiment improving in the short term, we are broadly neutral equities but still underweight the expensive US market in favour of the UK. We remain tilted towards commodities, especially gold.

Tariffs to extend Spikeflation

The pandemic ushered in a new regime of “spikeflation” characterised by periodic price level shocks and shorter boom-bust cycles. The Trump Tariff shock could end up like Covid – a deflationary panic giving way to an inflationary recovery. Stimulus is not a given in a supply shock, however, and a longer, more painful workout like the GFC can’t be ruled out.

The views expressed are the author’s own and do not constitute investment advice.
Source: Royal London Asset Management as at May 2025.

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