Investment Officer Netherlands

Geopolitical conflict and renewed inflationary concerns sapped the wind from high-yield sails.

European dependence on fossil fuels poses a risk to price stability. That is according to Frank Elderson, the Dutch member of the Executive Board of the European Central Bank (ECB). Energy shocks, which seem to occur with increasing frequency, are making it ever more difficult for the ECB to keep inflation at 2 percent per year.

As geopolitical tensions rise and instability in the Middle East persists, small-cap equities have shown notable resilience. So-called “domestic champions”—companies with dominant positions in their domestic markets—are benefiting from deglobalisation and shorter supply chains, and appear less volatile than their reputation suggests.

Nu het einde van de oorlog met Iran voorlopig niet in zicht is, steken recessieverhalen weer de kop op. Toch wijzen andere indicatoren erop dat de bullmarkt nog lang niet ten einde is.

Systematic investment strategies are benefiting from the growing “everyday” use of AI, particularly large language models such as ChatGPT. Partly for this reason, these strategies can now more easily find their way into the wealth segment, observed Adam Riley of Blackrock: “When people use the technology themselves, they better understand its power.”

Proxy advisers are facing mounting political pressure in the US, even as demand for their services grows elsewhere. For Glass Lewis, one of the two dominant global proxy advisory firms alongside ISS, that divergence is reshaping both its strategy and its product offering.

AI is quietly reshaping the cost base of the US economy by replacing labour and making processes more efficient. In services in particular, this is reducing unit labour costs and easing inflationary pressures. The bond market, however, has yet to fully recognise the policy room this creates for the Federal Reserve.

There was a time when software companies could rely on growth rates and compelling narratives about scalable business models. Revenue was paramount, profit an afterthought. A decade ago, investors routinely paid six to ten times annual recurring revenue for SaaS businesses, and that felt entirely reasonable. Anyone who raised concerns about cash flow was dismissed as an old-fashioned investor who did not understand the future. That era has ended.