In May 2025, following President Trump's withdrawal from extreme tariffs, investors reallocated capital more selectively. European equities saw GBP 369 million in inflows, marking the strongest performance in nearly a year. Conversely, US equity funds faced their worst inflow figures since September 2023, while UK equities faced notable outflows. A key trend emerged in technology stocks, especially those associated with AI. This month also highlighted divergent fund performances, with multi-strategy techniques thriving in volatile conditions, while fixed-income strategies struggled amid geopolitical tensions and price instability, particularly in oil markets.
Despite relative stability following the end of extreme tariff discussions, investors began reallocating capital more selectively, leading to significant shifts in market trends and performance.
The continued shift in investor interest shows a clear preference for European equities, while US equity funds struggle to maintain momentum amid emerging geopolitical uncertainties.
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