US President Donald Trump’s second term has roiled the global investment landscape, with tariff flip-flops sowing market uncertainty and stoking inflation — and creating challenges when selecting where to invest offshore.
“Our ‘Trump volatile world’ scenario acknowledges that his second term will likely bring a mix of pro-growth measures from fiscal stimulus and deregulation, and significant uncertainty from tariffs and retaliatory actions,” says Warren Buhai, senior portfolio manager at Stanlib Asset Management.
Buhai says the main trends for offshore investing in 2025 will hinge on the interplay of trade tensions, inflation pressures and technological change. “Being nimble and maintaining a broad perspective across regions, sectors and asset classes is essential to navigating the hazards and opportunities.”
Factors to watch, he says, include whether market rotations persist, how bond-equity correlations evolve and how central banks respond if inflation surprises on the upside.
What many investors agree is that Trump 2.0 warrants a rotation away from US equities, especially as US recession risks rise.
“US stock market returns over the past 15 years have been outstanding,” says Rob Perrone, investment counsellor at Orbis.
“However, half of those returns came from rising margins and valuations — a boost unlikely to repeat with margins and valuations already near record highs. That leaves us sceptical that the US market is poised for attractive long-term returns today.
That leaves us sceptical that the US market is poised for attractive long-term returns today
— Rob Perrone
“As the US represents about 70% of world stock market indices, we are similarly sceptical about the long-term returns on offer from global passive portfolios.”
With investors starting to question US exceptionalism, more are looking elsewhere for returns in 2025. However, Perrone cautions that picking winners will require rigorous research and ruthless selection.
“Most of our best ideas are not the stocks you see in headlines. For instance, last year, our analysts looked at 395 companies, but only a fifth were considered in Orbis strategies and we ultimately only bought 14.”
When turning over hundreds of ideas, Perrone says those left standing must be compelling enough to beat the companies the portfolio already holds. “These ideas must be more than ‘average’, ‘reasonable’ or ‘fair’. We want to find the most attractive opportunities anywhere in the world.”
Europe and China are emerging as the major beneficiaries of the chaos in the US.
With huge stimulus on its way in Europe — beyond the Ukraine rebuild project — wider deregulation and a watershed moment in Germany with unprecedented fiscal loosening, the eurozone is poised for growth in 2025 and beyond.
Among emerging markets, the China thesis is developing positively as shifting policies aim to boost consumption and stimulate domestic demand.
China offers significant upside in 2025 due to three core factors, says Feroz Basa, head of emerging markets at Sanlam Investments. “Valuations are exceptionally low, with the MSCI China index at a forward p:e of 10-11 vs the S&P 500’s 26, offering substantial growth potential if sentiment improves.”
Basa highlights Beijing’s robust stimulus as an important factor. “Rate cuts, fiscal expansion and property market support — the strongest since 2008 — signal a proactive shift to a ‘moderately loose’ stance, which will likely spark momentum after the March 2025 lunar new year.”
Finally, Basa says corporate strength is rising, particularly among tech firms, with growing cash flows, share buybacks and dividends, yet stocks remain undervalued compared with US counterparts.
“Despite risks like potential US tariffs, China’s export adaptability and low debt-to-GDP ratio (62% vs 122% in the US) provide resilience. With global investors underallocated and policy catalysts looming, China offers a rare high-reward opportunity for 2025.”
Should global inflation resurface this year, Craig Beney, CEO of Helical Capital Partners and convener of the India-South Africa Investment Network, says investors should look to countries where demand is predominately internally driven.
“In terms of domestic demand GDP growth, India is still the most promising country, though it is facing multiple contractions on listed shares, especially small and mid-caps.”
Semi-liquid private market funds with a strong track record, such as the Partners Group Global Value SICAV, which listed Vishal Mega-Mart on the Bombay Stock Exchange and National Stock Exchange in India in December 2024 at a 7.3 multiple to the investment, offer strong potential upside, Beney says.
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