Highlights

The global financial markets in the first half of 2025 were significantly influenced by uncertainties surrounding Trump's tariff policies and escalated geopolitical tensions, leading to volatile investor sentiments. In the second half, Qunyi Investment Trust views the influence of tariff policies on market sentiment as diminishing, while most central banks adopt monetary easing to mitigate recession fears. Investors are advised to be cautious of Trump's 'America First' initiatives. A strategic 'TACO' approach is recommended to enhance asset allocation flexibility.

Sentiment Analysis

• The overall sentiment of the article is cautiously optimistic, focusing on diminishing tariff impacts while emphasizing adaptable investment strategies.
• Geopolitical concerns and upcoming policy impacts add an element of caution to the investment outlook.
• The recommendation for the 'TACO' strategy reflects a positive shift towards diversified and flexible portfolio management.

Article Text

The global financial landscape in the first half of 2025 was fraught with challenges from Trump's unpredictable tariff policies and heightened geopolitical tensions. This led to a volatile investment environment affecting global market sentiments. As the year progresses into the second half, professionals at Qunyi Investment Trust believe that while tariffs continue to sway market emotions, their overall impact is waning.

Central banks worldwide are adopting monetary easing to counter potential economic slowdowns, a move that investors need to monitor closely. Additionally, Trump's 'America First' legislation's impact and geopolitical shifts remain critical variables. For navigating these complexities, Qunyi proposes the 'TACO' investment strategy to boost asset allocation adaptability.

The 'T' in TACO stands for Trend of AI, directing focus on the dominant technological investment trends. Despite trade wars presenting market challenges, tech giants with strong innovation resilience are likely to outperform, showcasing their prowess in economic turbulence. The 'A' represents Asia Chance, highlighting the economic resilience of Asian markets, with India benefiting from robust domestic demand, less impacted by global tariff policies.

'C' stands for Coupon Higher, promoting attention towards higher-yielding bonds amid fluctuating interest rate environments. Investors should consider short-duration bonds with attractive yields, such as financial bonds, prioritized non-investment grade bonds, and selected non-investment grade ETFs. Finally, 'O' signifies Offer more Stable, suggesting diversification through multi-region and multi-asset allocation tools like multi-asset funds and balanced risk-target portfolios to bolster investment resilience against single-market or single-asset volatility.

Qunyi's manager, Chen Chao-cheng, notes that Taiwan's GDP growth exceeded expectations in Q1, with companies reporting record revenues in April and May, defying past financial downturn superstitions. Short-term market volatility prompted by tariffs and geopolitics is unlikely to derail long-term bullish trends, especially with Taiwanese firms playing crucial roles as AI industry suppliers, promising sustained growth in profits and capital. The shift from Cloud AI to Edge AI further amplifies supply chain growth potential.

Moreover, Qunyi's fund manager, Tsai Yung-yu, states that while tariff negotiations extend and 'America First' legislation remains a concern, moderate inflation growth boosts consumer confidence, implying possible FED rate cuts. The second quarter witnessed significant U.S. market movements skewed by sentiment, with smart investors identifying undervalued opportunities in stocks and bonds, heralding a positive Q3 outlook for U.S. markets.

Key Insights Table