Lok said that July marked a period of stability in his investment strategy: maintaining exposure to risk assets while assessing the impact of recent US tariff announcements, global corporate earnings trends, and macroeconomic developments.

“While the US earnings season has continued to support the equity rally, emerging risks from tariffs further slowing the US economy and driving up price pressures are becoming increasingly evident,” Lok said in a note. “These trends are nevertheless not significant enough to change our portfolio positioning, especially as US corporate earnings are less correlated to the economic cycle, but more from the investment cycle in the technology sector.”

The bank's comments came out a time when US tariff policy, in relation to China and other countries, remains a live issue. On Monday, the US and China extended their trade truce for another 90 days, just before they were set to raise tariffs on imports of each other's goods. US President Donald Trump signed an executive order, external to keep the pause in place until November 10, while Beijing also announced an extension. Consequently, the US will hold its levy on Chinese imports at 30 per cent, while China will keep a 10 per cent tariff on American goods. 

In the second half of the year, Lok said differences between regions and countries will persist. However, growth is likely to be stronger in Asia than in developed countries thanks to activity in India and a few other countries, such as Indonesia and the Philippines. In developed countries, growth could return to 1.0 per cent, down from more than 1.5 per cent in the first half of the year, with less pronounced differences between the US and other major countries.

Lok highlighted that US equities have been dominated by the US earnings season in the second quarter of 2025, which has so far delivered a much stronger-than-expected 10 per cent year-on-year growth. The technology sector in particular reassured investors with robust earnings growth of 21 per cent year-on-year, despite the ongoing heavy investment cycle in artificial intelligence. Based on stronger earnings growth, he maintains a preference for US equities on a relative basis but sees limited upside on an absolute basis given that valuations are now reaching the top of their post-Covid-19 range.

The weakness of the US dollar and the strength of gold prices have paused, but he does not expect any structural change in the trends of either asset class.

Gold
After hitting all-time highs for April, gold has traded sideways. Despite this, Lok emphasized how the yellow metal has delivered a 28.4 per cent year-to-date return in dollars, outperforming global equities and bonds by a wide margin. Investors should not be concerned about this summer pause and instead view it as an opportunity, as it is not the first one in the three-year gold bull market. Lok believes gold is in the midst of a secular bull market and remains the foundation of inflation-adjusted wealth preservation and risk management for investors’ portfolios.

Equities
Global equity markets remained resilient in July, shrugging off decelerating US growth and geopolitical uncertainties, with strength once again coming from US markets. This is mostly driven by the earnings picture, where growth is concentrated in a handful of sectors, such as technology, which are less sensitive to the economic slowdown. Lok maintains a preference for sectors with strong growth visibility, such as technology and utilities, while steering clear of more cyclical sectors.

Meanwhile, Mathieu Racheter, head of equity strategy research at Swiss private bank Julius Baer expects the cyclical backdrop to keep favoring value and domestically-oriented cyclicals in Europe, at least in the short to medium term. “In the US, however, the leadership of large-cap growth remains intact, supported by structural drivers and robust earnings momentum. For investors, this means staying aligned with growth in the US, while leaning into cyclicals in Europe as the new market leaders,” Racheter said this week.

A recent survey released by California-based investment manager Franklin Templeton also found that 64 per cent of UK IFAs have been advising their clients to either maintain or increase their allocations to US equities. This comes against a backdrop of increased bouts of volatility after the US administration’s tariff policy. The survey reveals that IFAs are looking beyond the short-term volatility and remain confident in the long-term potential of US equities, signaling that US exceptionalism is far from over. See here.

However, other wealth managers are diversifying their allocations out of US equities in favor of Europe in 2025, although many recognize that US equities remain a cornerstone. Helen Jewell at New York-headquartered asset manager BlackRock, for instance, is positive on European stocks in 2025. As the US becomes less predictable, Ronald Temple, chief market strategist at New York-headquartered Lazard also recently said that Europe is becoming invigorated to make important structural changes that could lead to a more dynamic economy. Similarly, DWS and Edmond de Rothschild Asset Management believe that European equities still offer more opportunities. “There are basically three aspects arguing in favor of European stocks: first; the aspect of diversification, second, cheaper valuations, and third, the higher share of cyclical corporations in Europe,” Vincenzo Vedda, global chief investment officer at DWS, said in a note. See more commentary here, here and here.

Fixed income
In fixed income, Lok’s positioning remains unchanged, even as upside risks to interest rates continue to dissipate. This is largely due to the anticipated change in leadership at the Federal Reserve and the ongoing slowdown in the US economy. Inflationary trends are expected to persist throughout the year, suggesting a sideways trajectory for interest rates year-end approaches. High carry strategies, such as high yield, senior loans and AT1 CoCos, remain his preferred segment inside the asset class.

While the US earnings season has underpinned the equity rally, emerging risks – such as tariffs slowing the economy and fueling price pressures – warrant attention. Still, Lok believes that they remain insufficient to prompt a shift in UBP's portfolio positioning, so he maintains a broad diversification across asset classes.