Macroeconomic conditions in early to mid-2025 have been characterized by elevated uncertainty and divergent paths for major economies. Policy uncertainty and tariff impacts have led to high volatility, with the US dollar and Treasuries failing to act as traditional safe havens during this period of stress, a deviation from their behavior during events like the Global Financial Crisis (GFC) or Covid-19.

This unusual performance is partly due to the combination of a US debt downgrade and tariffs.

Year-to-date, fixed income returns have been comparable to equities, with conventional government bonds returning 7.3% and Investment Grade corporate bonds gaining 8%.

Alternatives, particularly infrastructure, delivered returns between 6.9% and 8.9%. Over a one-year period, infrastructure (17.6%) even outperformed broad equity (16.9%), while also providing a high income yield of 3.4%.

Gold, high-yield bonds, and infrastructure offered risk-adjusted returns that were either higher than or comparable to equities over the past year.