Q1 2025 ended with stark divergence in regional performance, driven by geopolitics, policy surprises, and sector-specific risks. What began as a promising start to the year, supported by solid economic data and resilient consumer demand, shifted abruptly toward risk aversion. The reintroduction of aggressive US tariffs under the new Trump administration sparked fears of a trade war and stagflation, leading to sharp losses in US equities and tech-heavy indices. Meanwhile, Europe experienced a fiscal renaissance, China leaned into AI and pro-growth reforms, and safe-haven assets surged. While volatility may persist, the quarter’s events are shaping a new global investment narrative - one where policy-driven dispersion and strategic selectivity are key.

February 2025 was an eventful month for financial markets, characterized by periods of strength and turbulence. The month began on a cautious note as markets reacted to escalating trade tensions, particularly the threat of new US tariffs on Canada, Mexico, and China. However, a temporary extension for Canada and Mexico provided relief, fueling a short-lived rally that pushed the S&P 500 to an all-time high on February 19. As the month progressed, sentiment shifted towards risk aversion, with renewed tariff concerns and weaker US economic data weighing on equities, particularly technology stocks. Despite these headwinds, European equities remained resilient, supported by strong corporate earnings and fiscal stimulus. Meanwhile, the move toward safe-haven assets boosted sovereign bonds and gold, offering investors a buffer against market volatility.

MBaer Merchant Bank AG is pleased to announce a new collaboration with the China Construction Bank Corporation (CCB) as a custodian for the RQFII/QFII program.