GLOBAL MARKET OUTLOOK

Finding the Right Path Implementation Guide

In our 2025 Global Market Outlook, we discussed investment outlooks and themes that are likely to shape this year. It’s time to turn those words into action.

Summary of Our Investment Solutions

Section

Theme

Outlook/Investment Theme	Index Solutions	Active Solutions
Macro/Geopolitical Outlook
Dynamic Asset Allocation		Flexible Asset Allocation Strategy
Geopolitical Hedges	Gold Strategy
Government Spending	S&P Global Infrastructure Index StrategyMorningstar Multi-Asset Global Infrastructure Strategy
Equity Outlook
US Large Cap Resilience	S&P 500 Index StrategyS&P US Quality FCF Aristocrats Index Strategy	US Equity Select StrategyUS Premier Growth Equity StrategyUS Enhanced Strategy
Broadening Into Small Cap and Cyclicals	Russell 2000 Index StrategyMSCI World Small Cap Index StrategyUS Value Spotlight Strategy
Selective in Europe Sectors	MSCI Europe Energy Capped 35/20 Index StrategyMSCI Europe Health Care Capped 35/20 Index StrategyMSCI Europe Industrials Capped 35/20 Index Strategy
Opportunities in Emerging Markets	MSCI EM ex-China Index StrategyMSCI Emerging Markets Small Cap Index Strategy	Emerging Markets Equity Select StrategyEmerging Markets Equity Enhanced StrategyEmerging Markets Small Cap Active Equity Strategy
Fixed Income Outlook
Value in Government Bonds	US Treasury Index StrategyGlobal Treasury Bond Index StrategyBloomberg International Treasury Bond Strategy
Go Active in Investment Grade		US Systematic Active Fixed Income Strategy
Income Across Cycles	US Index Loans Strategy	SSGA Blackstone Senior Loan Strategy
Improved Prospects for High Yield	Enhanced High Yield Bond StrategyEuro High Yield Bond Index StrategyUS High Yield Very Liquid Bond Index StrategyBloomberg Short Term High Yield Bond	SSGA Blackstone High Income Strategy
EMD Hard Currency	Emerging Markets Hard Currency Government Bond Index StrategyEmerging Markets ESG Hard Currency Government Bond Index StrategyBloomberg Emerging Market USD Sovereign & Sovereign-Owned Index Strategy
Beyond 60/40
Opportunistic		Tactical Asset Allocation StrategyFlexible Asset Allocation Strategy
Modifying Risk Premia		SSGA Blackstone Senior Loan Strategy
Diversifiers	Gold StrategyUS Treasury Inflation Protected Securities (TIPS) Index StrategyEuro Inflation-Linked Bond Index StrategyBloomberg Enhanced Roll Yield Total Return Index StrategyState Street Global Alternative Beta Strategy
GCC in Bloom
Equities	MSCI GCC Countries Index Strategy
Bonds	JP Morgan Saudi Arabia Aggregate Index Strategy
Transformative Technologies
Equities		SSGA Galaxy Transformative Tech Accelerators StrategySSGA Global Innovation Equity Strategy

Outlook/Investment Theme	Our Views
Macro/Geopolitical Outlook
Dynamic Asset Allocation	The global economy looks set to deliver the soft landing we projected, although rate cuts in the US may prove to be fewer than initially anticipated.
Geopolitical Hedges	Global geopolitics is increasingly shaped by geoeconomic fragmentation, with power dominance centered on technological superiority rather than traditional resource, territorial, or ideological competition.
Government Spending	The increase in global debt and associated servicing costs is increasingly a concern. Fiscal sustainability has taken center stage in global elections and market assessments, with implications for exchange rates and term premia, particularly in the US.
Equity Outlook
US Large Cap Resilience	US companies, driven by technology stocks in particular, can continue to deliver on what the market values most — profitability and earnings growth.
Broadening Into Small Cap and Cyclicals
Selective in Europe Sectors	Europe’s economy is still lagging due to a combination of weak consumption, poor domestic demand, and low fixed investment driven by a dearth of confidence in the region’s growth prospects.
Opportunities in Emerging Markets	We believe there are opportunities for selective investors in broader emerging markets, which includes profitable stocks with higher growth potential, particularly in smaller names.
Fixed Income Outlook
Value in Government Bonds	Government bonds in most advanced economies are expected to offer attractive returns as central banks shift focus from inflation to addressing weakening domestic and international demand.
Go Active in Investment Grade	Credit investors faced with limited scope for further spread compression and a maturing credit cycle can also expect dispersion and volatility — a fruitful regime for an active approach to credit.
Income Across Cycles	Historical trends indicate that longer-duration bonds tend to yield higher returns during such easing cycles.
Improved Prospects for High Yield	We see high yield debt in a broadly similar position to its IG counterpart. With spreads at their tightest levels since 2007, returns will be driven more by declining underlying yields rather than further significant spread compression.
EMD Hard Currency	Hard currency emerging market (EM) debt offers potential value for investors, as narrowing spreads and a positive outlook for US Treasuries improve its appeal.
Beyond 60/40
Opportunistic	A tactical asset allocation (TAA) strategy that tilts toward favored asset classes to generate risk-managed benchmark-beating returns can diversify existing betas in a portfolio.
Modifying Risk Premia
Diversifiers	Real assets such as gold, Treasury Inflation-Protected Securities (TIPS), commodities, infrastructure, natural resources, real estate, and digital assets can help provide a potential inflation volatility hedge, generate additional yield, or act as a diversifier.
GCC in Bloom
Equities	Amid rapid economic expansion, the attraction of the Gulf region for investors is increasingly less about oil and gas and more about future growth.
Bonds
Transformative Technologies
Equities	Confidence is growing that AI and Blockchain-related innovations are nearing a breakthrough to the mainstream.

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Explore Our Capabilities

Global markets are navigating short-term uncertainties alongside deeper structural shifts like the rise of transformative technologies. We offer a wide range of strategies and solutions that can help you stay ahead.

Equities

We offer a wide range of strategies and solutions across the equity spectrum spanning asset classes, investment styles, and market capitalizations.

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Fixed Income

Our fixed income solutions run the full gamut of the world’s fixed income opportunities and are designed to meet the varied objectives of our clients across geographic, duration, and credit-risk dimensions.

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Alternatives

The foundations of traditionally balanced portfolios may not be resilient enough in an evolving and uncertain macroeconomic landscape. Alternative investments are increasingly key to return potential and downside protection.

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Over the past 40 years our experts have built a universe of index and active strategies across asset classes to help our clients, and those who rely on them, achieve their investment goals. View all strategies to learn more.

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The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The views expressed in this material are the views of State Street Global Advisors through the period ended January 15, 2025 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed to be forward-looking statements.

All statements, otherthan historical facts, contained within thisarticle that address activities, events ordevelopments that SSGA expects,believes or anticipates will or may occurin the future are forward-lookingstatements. These statements are basedon certain assumptions and analysesmade by SSGA in light of its experienceand perception of historical trends,current conditions, expected futuredevelopments and other factors itbelieves are appropriate in thecircumstances, many of which aredetailed herein. Such statements aresubject to a number of assumptions,risks, uncertainties, many of which arebeyond SSGA’s control.

Readers are cautioned that any suchstatements are not guarantees of anyfuture performance and that actualresults or developments may differmaterially from those projected in theforward-looking statements.

The information contained in thiscommunication is not a researchrecommendation or investmentresearch’ and is classified as a‘Marketing Communication’ inaccordance with the applicableregional regulation. This means thatthis marketing communication (a) hasnot been prepared in accordance withlegal requirements designed topromote the independence ofinvestment research (b) is not subjectto any prohibition on dealing ahead ofthe dissemination of investmentresearch.

This communication is directed atprofessional dients (this includes eligiblecounterparties as defined by theappropriate EU regulator) who aredeemed both knowledgeable andexperienced in matters relating toinvestments. The products and servicesto which this communication relates areonly available to such persons andpersons of any other description(including retail clients) should not rely onthis communication.

The returns on a portfolio of securitieswhich exclude companies that do notmeet the portfolios sustainable strategycriteria may trail the returns on a portfolioof securities which include suchcompanies. A portfolios sustainablestrategy criteria may result in the portfolioinvesting in industry sectors or securitieswhich underperform the market as a whole.

This document provides summaryinformation regarding the Strategy.This document should be read inconjunction with the Strategy’sDisclosure Document, which isavailable from SSGA. The StrategyDisclosure Document containsimportant information about theStrategy, including a description of anumber of risks.

Investing involves risk including the risk ofloss of principal.

Equity securities may fluctuate in value inresponse to the activities of individualcompanies and general market andeconomic conditions.

Bonds generally present less short-termrisk and volatility than stocks, but containinterest rate risk (as interest rates raise,bond prices usually fall); issuer defaultrisk; issuer credit risk; liquidity risk; andinflation risk. These effects are usuallypronounced for longer-term securities.

Any fixed income security sold orredeemed prior to maturity may besubject to a substantial gain or loss.Investing in high yield fixed incomesecurities, otherwise known as “junkbonds”, is considered speculative andinvolves greater risk of loss of principaland interest than investing in investmentgrade fixed income securities. Theselower-quality debt securities involvegreater risk of default or price changesdue to potential changes in the creditquality of the issuer.

There are risks associated with investingin Real Assets and the Real Assets sector,including real estate, precious metals andnatural resources. Investments can besignificantly affected by events relating tothese industries.

Commodities investing entail significantrisk as commodity prices can beextremely volatile due to wide range offactors. A few such factors include overallmarket movements, real or perceivedinflationary trends, commodity indexvolatility, international, economic andpolitical changes, change in interest andcurrency exchange rates.

Investing in foreign domiciled securitiesmay involve risk of capital loss fromunfavorable fluctuation in currencyvalues, withholding taxes, fromdifferences in generally acceptedaccounting principles or from economicor political instability in other nations.Investments in emerging or developingmarkets may be more volatile and lessliquid than investing in developedmarkets and may involve exposure toeconomic structures that are generallyless diverse and mature and to politicalsystems which have less stability thanthose of more developed countries.Diversification does not ensure a profit orguarantee against loss.

Asset Allocation is a method ofdiversification which positions assetsamong major investment categories.Asset Allocation may be used in an effortto manage risk and enhance returns. Itdoes not, however, guarantee a profit orprotect against loss.

State Street Global Advisors