Winter is coming, and Europe is not retreating, it’s rearming. Amid rising geopolitical tensions, monetary uncertainty, and diverging fiscal paths, Europe offers not just shelter but substance. While US tech continues to dominate headlines, a quieter but powerful investment story is unfolding in Europe, especially for dividend-focused investors.
Beyond reshaping Venezuela’s political future, we believe the move by the US to seize President Nicolás Maduro is likely to reverberate across global energy markets and security debates. For investors, the implications may range from oil price volatility to a renewed focus on political risk in emerging markets.
Artificial Intelligence (AI) has recently become the defining theme of global markets. From powering breakthroughs in natural language processing to enabling autonomous systems, AI is reshaping industries at an unprecedented pace. However, as valuations soar and capex surges, concerns about an “AI bubble” dominate many investor conversations. So are we witnessing another dot-com moment? Our view is that short-term volatility is inevitable, but the long-term potential of AI remains vastly underappreciated.
The last decade has been a rollercoaster for China equity investors. Shifting policies, geopolitical tensions, and uneven growth have driven sharp market swings. In our view, however, investor sentiment has swung from excessive optimism to undue pessimism. While the last few years have certainly been more challenging given the macro environment, nonetheless China has made significant advances which, until recently, were underappreciated and undervalued.
October 2025 – Emerging market (EM) fixed income has performed strongly over the past month. Year to date, the hard currency sovereign debt index has returned 11.7%. Recent weeks have also seen a surge in EM sovereign issuance – USD 43.5 billion in September, more than any other month this year and nearly triple what was issued in the same month in 2024. EM sovereigns have issued around USD 200 billion in total this year.
Many people have been fascinated by the idea of using artificial intelligence (AI) for communication between men and machines. While HAL in Stanley Kubrick’s 2001: A Space Odyssey turned out to be less helpful to its human crew, its modern incarnation has been fascinating millions.
Get up! Stand up! Stand up for… (EM) central bank independence
September 2025 – As summer ends and it’s “back to school” (and markets), we can reflect on a relatively stable summer where carry rather than price appreciation has driven emerging market (EM) bond returns. This year’s impressive EM fixed income performance continues: hard currency sovereign debt returned 8.7% to the end of August and local currency was up 14% (data from Bloomberg).
Improvements in fiscal competence and policymaking are transforming perceptions of emerging market debt.
In the first two articles of our series, we followed our two decision-making angels, the “rational angel” and the “instinctive angel”, as they grappled with emotional biases and the limits of knowledge. We continue our reflection by looking at our brain’s tendency to simplify and streamline the data available to us, and the selfdeception that our instinctive angel derives from that simplification.
It has long been known that humans can make decisions in two ways, a rational, thoughtful way, and an instinctive, rash way. Goethe’s Faust called it the “two souls” that dwelt in his heart. More recently, the behavioural economist Daniel Kahneman called it the “two systems of thought” in his book Thinking, Fast and Slow. In lay parlance, people often speak about the two angels sitting on their shoulders and whispering into their ears, a cautious, “rational angel”, and a bold, “instinctive angel”.
In the first article of our series “Best Styles X Behavioural Finance”, we looked at the two angels that guide our decision-making, the “rational angel” and the “instinctive angel”, how the latter may lead us to follow emotional or socially influenced trends, and how our Best Styles strategy harnesses our rational brain by remaining stoic and objective.
Our instinctive angel may also twist what our rational angel tells us, however, and create the illusion of knowledge.
Emerging market debt has shown resilience in a year that has brought significant market volatility and uncertainty in global trade relations. In this environment, we think short duration bonds could be a useful way to diversify portfolios.
