Issue link: https://info.seic.com/i/1534862
Hot Topics. Trade Tensions Reloaded Tariff impacts sparked volatility in global equities, driven by economic growth concerns and the deterioration of longtime geopolitical relations. Why does it matter? Markets reacted sharply to President Trump's sweeping tariffs, triggering volatility and fuelling concerns over slower growth and rising inflation. While the policy strengthens U.S. protectionism and aims to boost revenue, economists worry it will drive up costs and dampen economic momentum. The hardest-hit countries include China, Mexico, and Canada. What are SEI doing? While tariffs may cause short-term instability, their impact is temporary, as are other disruptions such as a market correction. We remain confident in the benefits of committing to a long-term investment strategy, resisting the urge to make sweeping strategic shifts based on ever-changing headlines—especially when it's too early to predict what Trump will or won't do (or even undo). A Market Rally for the Many, Not the Few The rally broadened during Q1 2025, with companies besides the "Magnificent Seven" finally sharing the spotlight. Why does it matter? The recent selloff in the Magnificent Seven stocks has shifted attention to other areas of the market. This broadening out of the rally signals a potential shift in market leadership, giving the chance for other sectors and regions to outperform. Market-weighted strategies that previously thrived on high concentration levels now face heightened risks due to their heavy exposure to a small group of mega-cap technology names. Meanwhile, European and U.K. equities have been outperforming the U.S. year-to-date. What are SEI doing? SEI maintains an underweight position in mega-cap technology stocks compared to the broader market. While we retain some exposure and recognize their potential for strong performance, we continue to stress the importance of diversification as a core strategy for managing portfolio risk. We see attractive opportunities beyond mega-cap technology companies and have positioned our portfolios to capture potential gains across other segments of the m a r k e t . F u r t h e r m o r e , w e r e m a i n c o m m i t t e d t o g l o b a l diversification, seeking to benefit from growth in both developed and emerging economies. Michael Allen Senior Portfolio Strategist at SEI shares his views on the topics that investors should look out for in the year to come. Geopolitical Chessboard Shifting Geopolitical Tides: Ukraine Sees Progress, but Israel-Gaza Conflict Weighs on Markets. Why does it matter? The geopolitical landscape remains a key driver of market sentiment. The conflict in Ukraine has seen signs of d e - e s c a l a t i o n , w i t h r e n e w e d diplomatic efforts and improving conditions in key regions, easing some global energy supply concerns. In contrast, the Israel-Gaza situation continues to fuel uncertainty, keeping oil prices volatile and raising fears of broader instability in the Middle East. T h e s e d y n a m i c s h a v e d i r e c t implications for commodity prices, investor risk appetite, and global economic growth. What are SEI doing? While easing tensions in Ukraine have offered some relief to European markets, ongoing instability in the Middle East remains a source of concern and calls for continued caution. From a strategic perspective, we remain confident in our globally diversified approach across asset classes, which positions us to capture opportunities worldwide. Tactically, w e m a i n t a i n a s t r o n g f o c u s o n economic fundamentals to identify opportunities and manage risk as conditions evolve. These are the views and opinions of SEI which are subject to change. They should not be construed as investment advice. 9