As a group, how have you been boosting your investment capabilities, including taking advantage of technological advances in areas like AI?
We are looking at additional launches to complement our global credit platform and give clients more optionality across the yield curve.
What do you see as the big opportunities and risks for investors in 2025? How are you responding to these in a particular strategy?
The US Federal Reserve has begun its easing cycle and we expect a number of cuts next year, which will likely weaken the US dollar, and should help create a tailwind for emerging market investors. We expect rates to fall, but not to the ultra-low levels we saw before the pandemic, which should be supportive of growth stocks. This scenario lends itself well to the dominant investment style within the equity teams on our investment floor and should favour ESG-friendly stocks. For clients, worried about the impact of falling rates on their cash balances, money markets and short duration bonds could represent a favourable alternative.
China remains unloved by a lot of investors and many companies there are trading at knock-down valuations. However, we have seen the Beijing government set out a raft of stimulus measures recently which should support the Chinese economy and financial markets and – combined with low starting multiples – could create momentum in Chinese stocks and the wider region.
What are your priorities as an asset manager for the year ahead?
We are focused on building our brand as a single, global Federated Hermes, building on the strengths of the old Federated Investors and Hermes Investment Management businesses. We are looking to build on our reputation as a market leader in the US for money markets and scale-up our international platform across multiple currencies. In addition, we are seeking to globalise our fixed income platform by getting our investment teams across London and Pittsburgh onto the same order management system. This will also facilitate the seamless sharing of trade ideas and fixed income research and allow for the co-management of investment strategies by investment professionals sat on both sides of the pond. As we develop the global business we are looking to increase brand awareness of our growing private markets’ capabilities – which span private debt, private equity and real assets.
The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other communications. This does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments. Issued and approved by Hermes Investment Management Limited which is authorised and regulated by the Financial Conduct Authority. Registered address: Sixth Floor, 150 Cheapside, London EC2V 6ET.
For more information about Federated Hermes and our Global Emerging Markets capabilities, please click here: Global Emerging Markets Equity | Federated Hermes Limited (hermes-investment.com)
