The global economy is starting the year with steady growth and contained inflation. SEB’s investment experts recommend an overweight position in equities as broader productivity gains support company profits.
In a new issue of Investment Outlook, the experts highlight rising global activity, stronger demand for defence and infrastructure, and increasing use of artificial intelligence, which together support a more cyclical recovery. These trends, the experts believe, create conditions for sustained margins and broader profit growth.
“We see a global economy on solid ground. Strong growth, rapid technological progress and large structural investments favour equities,” says Carl Hammer, Head of Allocation at SEB Asset Management, the bank’s fund management unit. Hammer adds that geopolitical tensions and concerns about the long‑term value of the dollar remain risks.
Carl Hammer and his colleagues expect emerging markets to grow faster than mature economies in the coming years. The United States is supported by expansive fiscal policy and large investments in artificial intelligence. Europe benefits from higher defence and infrastructure spending, and lower European inflation gives central banks room to keep interest rates low.
The bank’s experts prefer equities over fixed income and see the best prospects in Europe and emerging markets. High valuations and currency uncertainty make the United States more challenging. On the fixed‑income side, SEB remains cautious about longer government bonds, particularly in the United States, where large deficits and a growing supply of bonds may push long yields higher.
The new Investment Outlook features two themes: emerging markets and small companies. More countries are signing new trade agreements and diversifying away from the United States, which supports emerging markets. These markets also have a high share of technology companies, lower valuations and potential support from a weaker dollar. In Sweden, improving economic conditions and attractive valuations create better prospects for small companies.
Carl Hammer, Head of Asset Allocation at SEB Asset Management, and Fredrik Öberg, Chief Investment Officer, come together to provide a brief overview of the key themes in Investment Outlook. The discussion is moderated by Pernilla Busch von Matérn, Investment Specialist.