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Strategist from East of the Elbe – Q2 2025

1 April 2025
Andras Vig
András Vig
Multi-Asset Strategist
World connection concept

Welcome to Applied Philosophy, a regular piece on global equity markets from András Vig and the Global Market Strategy Office. In the piece, they take an in-depth look at a topic of economic or market significance, before assessing how its evolution could inform or impact their model asset allocation.  

The total returns on assets in Central and Eastern EU member countries (CEE11) have been mostly strong within equities and have been subdued in government bonds in the last four months. Inflation has picked up in most economies, and interest rate expectations rose at the same time as global economic growth seemed to have remained sluggish, while policy uncertainty rose in the US. We expect growth to reaccelerate in 2025 both within and outside the region and move towards trend, and we expect inflation to stay above central bank targets. In Andras Vig's view, this outlook should support both government bonds and equities in our CEE11 universe.

 

 

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FAQs

Asset allocation is the process of dividing an investment portfolio among different asset classes, such as stocks, bonds and cash and so on. Bonds generally tend to be ‘safer’ investments than stocks and are, for example, seen as more defensive. Assets are allocated based on economic and monetary expectations.  

Model portfolios are a diversified group of assets. They are designed to achieve an expected return with the corresponding risk. Model portfolios are usually extensively researched and, in most cases, have a combination of managed investments.

Spreading the risk and number of potential opportunities across various asset classes, such as equities, fixed income, and commodities. The aim of diversification is to reduce the overall risk of the portfolio.

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