Written by Hamid R. Azarmi, Head of Business Development

In September 2025, global markets are navigating a complex macroeconomic landscape marked by persistent but uneven disinflation, diverging monetary policies, and slowing yet resilient growth. U.S. core PCE inflation remains elevated at 2.8%, fuelling cautious optimism for a Federal Reserve policy shift. The Bank of England has begun gradual rate cuts, while the Bank of Japan maintains its stance amid upward inflation revisions. These differing approaches are adding volatility to interest rates, currencies, and capital flows, requiring investors to adopt a more strategic and risk-aware posture. 

Portfolio positioning now calls for a focus on quality, liquidity, and selective opportunity. Short-duration sovereign and investment-grade corporate bonds remain preferred to manage policy uncertainty, supported by diversified global exposure and currency hedging. In equities, defensive holdings in companies with strong balance sheets, stable cash flows, and pricing power are favoured, with Europe and select Asia-Pacific markets offering better value than the U.S. Real estate investments should prioritise structurally resilient sectors such as logistics, data infrastructure, and ESG-compliant residential, avoiding underperforming legacy office and retail. Selective exposure to emerging markets like India and Southeast Asia is attractive due to improving yields and strong domestic demand, but active management and currency vigilance remain key.