The state of New York issued the first municipal bond in history in 1812 to finance the construction of a canal. More than two centuries later, this market exceeds $4 trillion, with more than 60,000 issuers and a very low default rate. With yields around 5% and strong exposure to infrastructure—most issuances finance public-use assets such as airports, hospitals, water systems, or universities—this asset class remains one of the least covered by international investors, who represent only 3% of the market.
The BNY Mellon US Municipal Infrastructure Debt fund marks nine years since the launch of its UCITS version. Over this period, it has outperformed the US Aggregate index, U.S. corporate debt, and even Treasuries. This performance reflects both the market’s higher structural carry and increased international demand.
Jeffrey Burger, one of the five co-managers of BNY’s municipal bond strategy—a firm with a presence in this market since 1933 and $40 billion under management in this segment—recently visited Spain to explain the potential of this asset class. “The municipal bond market is the primary mechanism for financing infrastructure in the United States, both historically and today,” he notes. It is also a public, transparent, and liquid market that offers “returns and risks typical of fixed income, compared with private credit.”
How does the municipal bond market differ from other U.S. public debt markets?
It is a result of the structure of the U.S. system of government, divided into three levels: federal, state, and local. Below the federal government—which includes Congress, the President, and the Supreme Court—there are 50 states and thousands of local entities, as well as nonprofit institutions such as universities. From its inception, the U.S. model sought to limit the role of the federal government and distribute responsibilities. By design, it does not assume most infrastructure investment.
Why is the private sector less involved in infrastructure in the U.S.?
The country’s size makes it difficult to achieve economies of scale and limits potential returns for the private sector. This is compounded by regulatory differences between states, as well as geographic, climatic, and social factors. In this context, municipal bonds tend to behave like natural monopolies, which contributes to their low default rate. Defaults are exceptional, such as the case of Detroit in 2013.
Why is this asset class under-researched outside the U.S.?
Until 1986, all municipal bonds were tax-exempt for U.S. investors, which reduced their appeal for foreign investors. After that year’s tax reform, some became taxable. The tax treatment depends on how the funds are used: issuances for public services are typically tax-exempt, while those with economic return potential may be taxable. For international investors, this creates an opportunity: bonds with the same credit quality can offer higher yields in their taxable version, with no tax impact for foreign investors.
How do municipal bonds compare with Treasuries?
High federal debt—$38 trillion—has led some investors to seek alternatives within U.S. public debt. In this regard, municipal bonds offer higher spreads, better credit quality, and diversification. Unlike the federal government, states cannot run budget deficits. In addition, municipal bonds primarily finance infrastructure tied to revenue-generating assets, not current spending. Another key difference is amortization: municipal bonds typically repay both interest and principal, whereas federal debt is regularly refinanced. This fiscal discipline reduces default risk. Currently, they offer around 85 basis points of spread (OAS) and, with similar duration to Treasuries, yields comparable to corporate debt with lower credit risk.
What is the bond selection process like?
The team consists of 23 professionals, including 10 analysts specialized in municipal credit. Their objective is to identify relative value, detecting bonds that are undervalued or overvalued based on their fundamentals. This analysis allows them to generate alpha versus the index. The historically low default rate in investment grade reinforces this approach. The team is complemented by five senior managers and a specialized trading group. Exclusive specialization in this segment is one of the main differentiators of the platform.
How is the strategy currently positioned?
The fund maintains a duration of seven years, but with a beta of between 0.65 and 0.70, implying lower volatility than the index. This is partly due to the investor profile, mainly high-net-worth U.S. investors with buy-and-hold strategies, and the presence of call options, which reduce effective duration. The strategy prioritizes revenue bonds, backed by specific income streams from assets such as airports, water systems, or educational institutions, with mechanisms that ensure debt service coverage.
The portfolio has significant exposure to education and healthcare, particularly in high-quality issuances. In higher education, uncertainty around international students has increased yields. In healthcare, reduced subsidies have pressured the sector, creating opportunities in hospitals less dependent on public support, located in higher-income areas or playing an essential role in their communities.
Photo courtesySimon Morton-Grant, Client Portfolio Manager of the CT (Lux) Japan Equities Fund at Columbia Threadneedle Investments
Japan has shifted from behaving like an equity market where investors focused on companies with low margins and high capex to one centered on efficiency and return on capital, where governance has become the cornerstone of this transformation. “The underlying story in Japan is extremely attractive,” says Simon Morton-Grant, Client Portfolio Manager of the CT (Lux) Japan Equities fund at Columbia Threadneedle Investments.
The expert, who recently visited Spain, highlighted the multiple growth catalysts his firm currently sees in this market: first, efforts to continue increasing shareholder returns (ROE) remain in place, with a new record for share buybacks in 2025; second, the country is once again posting positive growth, and after deep reforms in recent years, the TOPIX index has become a reflection of that growth; third, Japanese household savings amount to around $14 trillion, and half of that money is held in cash, leading the firm to expect—in a context of rising inflation—that part of those savings will flow into equity markets to avoid loss of purchasing power; fourth, the expert highlights the willingness of the new government to continue deep political and economic reforms to further stimulate national growth. For these reasons, the expert is clear: “Any point of weakness from here on could be a good entry point to invest in Japan’s long-term structural growth story.”
Is the rise in geopolitical risk due to the Iran conflict affecting the Japanese stock market in any way?
We want to make it clear to our clients that disruptions around the Strait of Hormuz have the potential to impact the global economy. Japan imports more than 90% of its crude oil from the Middle East, although it makes virtually no direct imports from Iran. We believe that, for now, this situation remains contained in Japan’s case, as it has several measures to mitigate these effects. First, it has oil reserves equivalent to 245 days—one of the highest coverages among developed economies, roughly eight months—which provides a short-term buffer. Second, Japanese authorities have estimated that oil prices would need to reach and remain at $175 per barrel for a prolonged period for Japan to enter a recession; currently, we are far from that level. Even if it were reached, it would need to be sustained for some time.
This is therefore a risk that must be monitored. However, the team has just returned from Japan and, in meetings with companies—at a time when this situation was already beginning to unfold—firms believed they could pass on increased costs to consumers without materially affecting margins. It is an evolving conflict and should be closely watched for changes, but at current levels we do not see a cause for excessive concern.
Can movements in the Japanese yen significantly impact Japanese companies, especially exporters?
It should be noted that we are not macroeconomic specialists. That said, we believe that if the yen were to exceed 160 against the dollar, the government or the Bank of Japan could intervene. Within the 140–160 range, the environment remains relatively comfortable for Japanese equities. Moreover, the historical correlation between a rising Japanese stock market and a weakening yen has diminished in recent years. Japan is no longer necessarily a bet on a weak yen. The economy now has more growth drivers: domestic companies are contributing to earnings growth and, therefore, to index performance, something that was not the case 10–15 years ago, when exporters were the main engine. In the portfolio, we have a natural hedging mechanism: a weak yen benefits exporters, while a strong yen favors domestic businesses.
Sanae Takaichi plans to deepen Abenomics. How could this affect your asset class?
We do not usually pay much attention to changes in prime minister, but in this case it is relevant. She is a potentially transformative figure who breaks with the traditional profile of Japanese political leadership and maintains a strong pro-growth focus. She is an heir to Shinzo Abe’s legacy: expansionary fiscal policy, accommodative monetary policy, and significant fiscal stimulus. We believe her economic and reform agenda could boost the market and open a new phase of growth in Japan. In addition, the new governing coalition has a clear pro-growth bias and supports decentralization, shifting part of the economic weight from Tokyo to other regions such as Osaka. This could increase the value of land and assets in those regions and foster greater economic dynamism.
Another key element is her industrial policy and the associated investment opportunities. Takaichi prioritizes increased spending on artificial intelligence, semiconductors, nuclear reactivation, defense, and economic security. These areas form a new universe of opportunities under the current administration. She has also managed to unify the party, attract younger support, and consolidate a stable political base—crucial for implementing meaningful reforms.
Where do valuations currently stand?
Compared to historical averages, valuations have increased slightly over the past year. However, the higher multiples often highlighted in the media are heavily influenced by large-cap and more expensive stocks. Looking at the TOPIX index, around 35% trades below book value, indicating that many attractive opportunities still exist. In relative terms, while U.S. valuations are above their historical average, Japan remains cheaper, especially in a context of rotation away from U.S. exceptionalism.
Where are you finding opportunities?
Historically, Japan has been associated with automation, a highly sought-after sector. However, following a recent visit, the team has identified new areas of interest. First, infrastructure renewal. Two growth drivers coexist: on one hand, more visible sectors such as artificial intelligence or electric vehicles, with strong demand but higher cyclical sensitivity; on the other, the replacement of infrastructure built during the late-1980s bubble. The latter represents structural, stable, long-term demand, especially in construction.
Second, the so-called “oshikatsu” economy, or fandom economy, where consumers follow athletes, actors, or content creators. This phenomenon, particularly relevant among Generation Z, creates opportunities in merchandising and digital platforms. Third, economic security and defense. The new government is adopting a firmer foreign policy stance, and increased defense spending as a share of GDP opens opportunities in shipbuilding, cybersecurity, and other segments.
Of course, we remain exposed to companies linked to robotics, a structural trend in Japan, which accounts for approximately 50% of the global industry.
What risks are you monitoring?
One of the main focuses is public debt. Although the debt-to-GDP ratio is around 200%, 90% of the bonds are held domestically, which provides stability. In addition, high tax pressure and a near-zero deficit reinforce sustainability. By comparison, the U.S. or China have deficits of around -6%. The second risk is geopolitical, particularly in the relationship between Japan and China. While tensions exist, we do not anticipate structural deterioration, given the significant global impact it would have. Finally, the Middle East remains the main short-term risk. Oil price developments will be key, as they could trigger inflationary or energy tensions in Japan.
Do you expect a rebound in inflation in Japan?
It is possible in the current context, but levels remain manageable. The Bank of Japan postponed a rate hike initially expected in March, likely to April or May. Even if rates reach 1% or 1.25%, monetary policy would remain accommodative. We believe the Bank of Japan is in a normalization process, not a tightening cycle. At current inflation levels, companies can pass costs on to consumers without significant impact. This reflects a structural shift in Japan toward a virtuous cycle of wage growth and inflation, which could be positive for the economy, economic policy, and markets.
Exchange-traded funds have transformed the world of investing. The number of ETF launches reached a record in 2025, with more than 1,000 new funds coming to market. However, recent launches have become “more specialized, less diversified, and more expensive,” according to a Morningstar analysis.
According to the firm, the growing number of these specialized ETFs has revealed a “concerning” trend: rather than solving real problems, many are simply riding dominant trends.
This often happens after the underlying stocks have already delivered strong short-term returns, according to Morningstar, which adds that “the irony is that these ETFs tend to come to market at, or near, the peak of a narrative, when valuations are inflated and return expectations are less optimistic.”
The result is that investors end up holding speculative portfolios with high fees. These ETFs “amplify the hype around underlying themes and can contribute to the formation of small bubbles.”
Historically, similar ETF launches have clustered in periods when specific themes performed well, often accompanied by narratives about how those themes would “change the future.” One example is ESG-focused ETFs, which went through this phase in 2021. ETFs linked to artificial intelligence and cryptocurrencies have taken center stage since 2025.
Rather than being grounded in solid investment principles, most of these launches have been timed to capitalize on the enthusiasm surrounding a particular theme.
The Performance Problem
Because many thematic ETFs are launched near market highs, they often face a difficult path from day one. Years of analysis across multiple market cycles show that thematic ETFs tend to lag the broader global equity market after launch, largely because “they are expensive and their valuations at inception are already inflated,” the firm notes.
Morningstar observes this pattern in several recent periods. In 2021, 38 new ESG-focused ETFs were launched following a strong 2020. As of February 2026, only 21 of those 38 vehicles remain. “This high closure rate could be attributed to inconsistent or disappointing performance, an inability to attract new investors, or both factors.”
In 2025, 70 new ETFs focused on digital assets and cryptocurrencies were launched. Some simply track the price of cryptocurrencies such as bitcoin, solana, XRP, ethereum, or dogecoin. Others take already “inherently volatile” cryptocurrencies and add leverage or options that alter their risk/return profile.
The firm notes that these launches followed a couple of exceptional years for cryptocurrencies: bitcoin surged 150% in 2023 and 125% in 2024. However, “investors in more recently launched ETFs in this theme were unable to replicate those spectacular returns,” as bitcoin reached its peak in October 2025 and has since fallen by nearly 50%.
Meanwhile, diversified benchmark indices continued to post steady gains. “In the long term, the combination of poor timing, volatility, high fees, and lack of diversification tends to result in underperformance compared to ETFs that track the broader market,” the firm states.
Concentration and Limited Diversification
Although thematic ETFs may appear diversified at first glance, they are often far more concentrated than investors realize. Most of these vehicles include only a handful of stocks, compared with broad market indices that contain between 500 and more than 5,000 securities, according to Morningstar.
Of the 1,117 ETFs launched in 2025, only 182 had more than 100 holdings in their portfolios. This means that approximately 84% of newly launched ETFs are considerably more concentrated than many investors believe. In addition, nearly 46% of the 1,117 ETFs launched in 2025 held fewer than 10 securities.
“Concentrated portfolios magnify the impact of stock-specific risk and make fund performance disproportionately dependent on a small group of volatile stocks,” the firm notes. It also points out that thematic ETFs with many holdings “may have achieved that diversification by including stocks that have little connection to the concept being marketed to investors.” As a result, the concept can become too diluted, and the ETF may not actually provide the exposure it claims.
Higher Fees and “Mini-Bubbles”
Fees have also started to move in the “wrong direction”: ETFs launched in 2025 had, on average, higher expense ratios than more established funds. Moreover, the firm finds no evidence that these higher costs translate into benefits for end investors.
The rise in expense ratios is largely due to the growth of actively managed ETFs. Of the 1,117 ETFs launched in 2025, 943 do not track any index and would be considered actively managed. The equal-weighted average expense ratio for this group stood at 76 basis points. The common denominator among these recent launches appears to be “high fees, limited diversification, and unjustified complexity.”
When the enthusiasm surrounding these products fades, the correction can be swift and severe. Valuations begin to normalize, triggering sharp declines in the underlying stocks. ETFs focused on small, speculative securities can exacerbate these price drops as fear and selling pressure increase. This often coincides with a wave of ETF closures, as funds that once attracted investors during the boom struggle to remain economically viable once performance weakens.
Ultimately, many investors are left with losses that could have been avoided had they focused on sound principles rather than chasing returns. Ironically, trying to get rich quickly is often the slowest way to build wealth.
What Investors Should Do
Narrative-driven cycles are nothing new, according to Morningstar, as markets have experienced them before and continued to thrive. The keys to long-term success have not changed: diversification remains the first line of defense, helping to reduce stock-specific risks inherent in narrow themes.
Fees also deserve close attention: higher expense ratios require stronger performance to justify the cost. Thematic ETFs have a weak track record, and most fail to outperform the global market.
It is advisable to maintain a healthy degree of skepticism when certain themes dominate headlines: trends that capture media attention and then become the target of a new ETF often signal that the narrative has already been fully priced into the market.
In conclusion, the firm notes that the growing variety of ETFs demands greater scrutiny than ever from investors. “They must look beyond the ‘ETF’ label and evaluate what they are actually buying.”
They also recommend considering the number of holdings in the portfolio, the economic fundamentals behind the narrative, the fees relative to alternatives, and whether recent performance reflects solid fundamentals or temporary enthusiasm. “The idea is to avoid the pitfalls of narrative-driven ETFs and focus on strategies with a solid foundation,” as “ETFs remain powerful tools when used with the same care and discipline that defined their initial success.”
Therefore, in a market environment where innovation is abundant and enthusiasm spreads quickly, “thoughtful decision-making remains the most reliable safeguard.”
Photo courtesySophie del Campo, Head of Distribution for Southern Europe, Latin America, and US Offshore at Natixis IM
Natixis Investment Managers Landed in Spain 15 Years Ago. The timing could not have been more challenging, with the eurozone immersed in a severe sovereign debt crisis, but in the long run the strategy has paid off. Sophie del Campo, Head of Distribution for Southern Europe, Latin America, and US Offshore, has been part of the project from day one and describes herself as “super proud,” particularly because the office closed 2025 with record assets.
During an interview conducted at the Natixis Investment Managers Thought Leadership Summit 2026, recently held in Paris, Del Campo highlights the spectacular growth of Natixis IM in the Iberia region during this time, which she attributes “to the quality of the products we offer and the diversification they provide.” Last year, she also celebrated ten years since the opening of the first of the group’s three offices in the Americas: Mexico, Colombia (from where Peru is also covered), and Uruguay (which also supports Chile).
Today, the company maintains its strong commitment to active management and is doubling down on its multiboutique model, which Del Campo describes as “a spectacular differentiating factor,” and is fully engaged in its strategic plan for the coming years, which includes boosting its private markets business with the launch of new products soon. “We are in a quite sweet phase of exponential growth,” the expert summarizes.
What is your assessment of these 15 years?
The timing has been spectacular because it is true that when you open an office, from the moment people get to know you until you establish yourself, it takes time. And the time we needed to develop the business coincided with a somewhat more challenging market environment, but our strategy has been the same one we follow in all markets: a multi-manager, capabilities-based model, starting with a few ideas and a limited number of products. Today, we distribute in Spain products from 13 of our 16 asset managers; the three we do not distribute are purely American managers whose funds do not have a UCITS version.
Our strategy is super clear: we do not run product campaigns; we work with each client to identify what is simplest for their portfolios. This allows us to achieve diversification alongside the product offering. We think long term, about how to combine our active management with more basic strategies using high-quality, value-added products.
In addition to the product itself, we consider the service we provide alongside it to be even more important, particularly portfolio construction through our Natixis Investment Manager Solutions team and our Durable Portfolio Construction service, through which we have analyzed more than 2,000 client portfolios. This has allowed us to show clients how they could build portfolios that include competitors’ products while adding our own, helping us demonstrate to private bankers and fund-of-funds managers the value of incorporating new ideas.
How has product demand changed over these 15 years?
In recent years—and not only in Spain—we have observed strong demand for alternatives to purely passive exposure. This has allowed us to offer products from managers within our affiliated model such as DNCA or Harris Associates, which build portfolios in a very different way from passive managers.
Why do you strongly support active management?
We have always said that passive management is important, but active management is extremely important for diversification. Active management is also active risk management. And this is precisely what has driven our exponential growth in both equities and fixed income: after what happened in 2022, when there was high correlation between equities and fixed income, many clients asked us for fixed income positioning that goes beyond plain-vanilla indexed funds. We are fortunate to have an انتہائی diversified product range, solid in terms of return and risk, with products such as DNCA Alpha Bonds, a flexible fixed income strategy that provides significant diversification in portfolios.
Will you promote funds that offer access to private assets this year?
Our focus on private assets positions us as a highly relevant partner for institutions looking to begin distributing private asset products within their networks, because we have experience through our own network in France and are willing to share it with our clients. In addition, our group also provides seeding to ensure a significant asset base. We are an extremely conservative firm in this regard; we understand that this is a much more sophisticated and complex asset to sell, and that we must support our clients throughout this journey.
You are also responsible for the business in LatAm and US Offshore. How has it evolved?
We are quite proud of the development we are achieving in LatAm and Offshore. We have been the same team for ten years; we have built this together and achieved extremely interesting things in the region. For example, in Mexico we launched, together with Santander, a US equities product that is now the largest domestic fund in its category in Mexico, with more than $450 million.
What interests me about the Latin American market is that each country has a different framework in terms of regulation and product distribution. What we have done is determine, in each country, the strategy we wanted to follow, taking into account the market context to decide whether to focus on institutional clients or distribution clients. In Mexico, for example, we initially focused purely on institutional clients. But we realized, by speaking with our clients, that there was demand for higher-quality local products. That is why we decided to develop, together with Santander, a high-quality US equity product for its private banking arm, which is a very important component of private banking portfolios in Latin America.
In Colombia, our target is more evenly split among institutional clients, pension funds, private banking clients, and local asset managers. In Peru, we divide our focus between purely institutional clients and more market-oriented clients, including local institutions and family offices. In both markets, we see strong interest in diversifying with international assets.
Uruguay remains a hub for offshore private banking in Latin America, alongside the United States—Miami, Houston, etc.—and there are major private banks and key players we work with in both Uruguay and the U.S., and the results have also been very positive.
As a result, we have long been present in all major American private banks. In terms of results, I believe we are in the top two compared to other international asset managers, and in some American firms and distributors we were number one last year.
Where does Natixis IM stand now in the region?
We are currently in a very strong acceleration phase. Natixis IM is a somewhat different player in the region. Although we are a French group, we cannot be placed within the group of European asset managers due to our structure and the fact that 50% of what we manage globally is managed from the U.S. This makes us a very strong partner. As a result, we can bring U.S. expertise by offering products from U.S.-based managers such as Loomis Sayles or Harris Associates, while also providing our European expertise and products that are quite different from what our clients in the region previously had, such as the flexible fixed income fund from DNCA, where we are gaining significant market share.
For us, the Iberia–LatAm connection is just as important as the LatAm–US Offshore connection, because it allows us to achieve a strong alignment of interests with clients. We have an organization very similar to that of large Spanish banks with a presence in Latin America, which enables us to provide local support. We also work with major independent advisors.
In 24 hours, markets have shifted from pricing in a potential “geopolitical black swan” to opening with broad gains—for example, in Europe, Germany’s DAX rose 5% and the UK’s FTSE 100 about 2%—and oil futures falling by approximately 14%, bringing Brent crude back below $100 per barrel (around $94). In addition, the US dollar index has dropped by around 1%, with the euro/dollar exchange rate returning above the 1.17 level for the first time since the start of the war. The reason is clear: there is a sense of relief following the announcement of a temporary ceasefire between the U.S. and Iran, as energy risk has decreased.
For markets, the key aspect of this agreement points to a “full, immediate, and secure reopening of the Strait of Hormuz,” although it remains to be seen how this will materialize. “Markets do not need absolute certainty to rebound; for markets, a ceasefire significantly reduces the risk of escalation in the short term. That reduction in tail risk is often enough to trigger a rapid repricing, even if long-term uncertainties persist,” says Ray Sharma-Ong, Deputy Global Head of Multi-Asset Custom Solutions at Aberdeen Investments.
For Matthew Ryan, Head of Market Strategy at Ebury, the word that describes markets today is relief. “Attention is now turning to the next critical negotiations between the United States and Iran. The key question will be whether these talks achieve lasting peace or whether Tuesday’s ceasefire has merely postponed the issue,” he states. In his view, market participants will not fully commit to “risk-on” trades, nor will oil futures or the dollar return to pre-war levels until a permanent agreement is reached. “As things stand, this remains only a temporary pause in the war, and despite the ceasefire, the dollar is still trading about 1% higher than before the conflict,” he notes.
Toward a Rebound
For his part, Sharma-Ong argues that today’s market moves have been seen before: “On April 9, 2025, the S&P 500 surged 9.5% in a single session after Trump announced a 90-day pause on reciprocal tariffs introduced on April 2, 2025. At that time, as in the current situation, several major uncertainties remained. However, the removal of extreme downside risk was enough to trigger a strong rebound.”
With this in mind, the Aberdeen expert ventures to say that in the following months, “markets surpassed previous highs.” “The relief rally is expected to be stronger in North Asia. Fundamentals will return to center stage, and these—not geopolitics—will lead markets if the geopolitical risk premium fades. In addition, we expect a stronger rebound in markets that were most affected by the oil crisis and the rise in risk aversion. Asian equity markets that are more dependent on oil imports, particularly Korea, Taiwan, and Japan, are likely to recover more quickly. These markets are more exposed to fluctuations in energy prices and global risk sentiment,” adds Sharma-Ong.
From an investor perspective, Michaël Nizard, Head of Multi-Asset and Overlay at Edmond de Rothschild AM, believes the key issue will be assessing macroeconomic impacts, particularly on growth, inflation, and monetary policy dynamics. “Although the risk of recession is not yet imminent, the effects will be clearly in the eurozone. Indeed, this geopolitical shock in the Middle East acts as an energy supply shock, reigniting global inflationary pressures and directly affecting growth. The rise in oil and gas prices is particularly harmful for Europe, whose industry remains dependent on these resources, increasing the risk of a loss of competitiveness,” he states.
However, Nizard considers this context different from that of 2022, when the global economy simultaneously faced a supply shock and excess demand linked to savings accumulated during the pandemic and large government fiscal stimulus: “The labor market is not under the same severe strain as in 2022. For all these reasons, we believe central banks should act cautiously and avoid overreacting to the rise in inflation in the coming months. A lower risk of monetary policy mistakes will also act as a tailwind for risk assets, both in equities and in the corporate debt market.”
The Energy Question
Another clear conclusion following the agreement is that energy markets may have passed the supply shock peak. “In line with our oil analyst’s view, energy markets have likely moved past the peak of the supply shock, as prices had already reached economically damaging levels, which typically trigger de-escalation dynamics,” highlights Christian Gattiker, Head of Research at Julius Baer.
In fact, this ceasefire comes at a time when energy markets were already showing initial signs of stabilization. “Even at the height of tensions, the scenario was never one of a total supply disruption, but rather of a partial and shifting opening. As highlighted in recent days, transport flows through the Strait of Hormuz have continued to increase, supported by Iran-protected routes and greater international involvement. Although still below pre-conflict levels, these flows—along with alternative export channels—have mitigated the supply shock and given energy supply chains room to adjust. This resilience is key,” adds Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer.
According to Fidelity International, despite the drop in Brent prices on April 8, energy markets are unlikely to quickly return to pre-conflict price levels, as geopolitical premiums are likely to persist. “We assume that Brent will trade around $85 for the rest of the year following any resolution. In addition, risks to supply chains beyond energy markets imply that this shock will not disappear immediately. This impact will be felt most strongly in Asia, due to direct exposure to the Strait, followed by Europe. Despite being relatively insulated from the direct impact of this conflict, the United States will also feel the effects of the global macroeconomic shock and higher global energy prices,” they state in their latest analysis.
What Now
All this market optimism and the views of investment experts come with a warning: risk and volatility have not completely disappeared. “The ceasefire fits well within the established pattern of geopolitical crises, where an intense escalation phase creates the conditions for an eventual exit. This supports our base case of a fast and intense shock, with limited lasting damage to global energy supply. Although geopolitics in the Middle East will remain present, we expect energy markets to gradually decouple from political noise, reducing the risk of a sustained oil-driven macroeconomic shock. However, investors should be cautious in interpreting this as a definitive resolution. The conflict continues to follow a ‘reality show pattern,’ characterized by rapid escalations, tactical pauses, and renewed tensions,” warns Gattiker.
Experts clearly agree that the durability of a ceasefire and any conditional agreement that follows remains uncertain. There is also some skepticism that the United States or Israel will accept the 10-point conditions proposed by Iran, particularly as it seems unlikely that the U.S. would end its military presence in the Gulf.
“If the two-week ceasefire holds and some form of agreement is reached that allows the reopening of the Strait, the global economic impact of this conflict will be manageable. We would view this as a temporary price disruption that may not affect consumers or businesses in some economies. In that case, central banks could broadly resume the path they were on before the conflict. In fact, if commodity prices normalize quickly, attention could shift more toward the impact on growth,” explains Michael Langham, Emerging Markets Economist at Aberdeen Investments.
Fidelity International adds one final reflection: “Our view remains that the most likely outcome is a disorderly resolution, with geopolitical risk premiums likely to persist in the days following the war. Tail risks remain elevated, with an active risk that we could find ourselves in a situation where the parties continue to have incentives to escalate again in order to de-escalate, which entails clear asymmetric risks. Although we are likely closer to the end than the beginning of this conflict, high uncertainty persists. Meanwhile, market stress remains clearly visible in some channels.”
Photo courtesyFranco Cassoni, Associate Director of US Offshore Sales at Janus Henderson Investors
Janus Henderson Investors Strengthens Its US Offshore Client Group Team With a New Addition. As announced by the firm, it has appointed Franco Cassoni as the new Associate Director, US Offshore Sales. Cassoni, who assumed the role on April 6, will be based in Miami and will report to Paul Brito, Executive Director of the Client Group North America Offshore. In this position, he will be responsible for strengthening Janus Henderson’s existing relationships with local and global institutions, as well as developing new partnerships in the US Offshore market.
The firm believes that Cassoni brings valuable experience to the role, as he joins from Citi, where he worked for four years in two different positions; most recently as Assistant Vice President, which allowed him to gain a deep understanding of the US Offshore market. Franco holds a degree in Business Technology, Management and Marketing from the University of Miami. In addition, he is bilingual in English and Spanish.
Following this announcement, Paul Brito, Executive Director of the Client Group North America Offshore at Janus Henderson, commented: “We are delighted to welcome Franco Cassoni to Janus Henderson. His experience in the US Offshore market and his client-focused approach make him a very valuable addition to our team. As we continue investing in the US offshore channel, his focus on developing long-term relationships will support the next phase of our growth in the region and our ability to deliver tailored solutions to investors.”
Photo courtesyFrank Groven, Head of Global Financial Institutions at Robeco; and Amr Albialy, Head of Institutional Sales for EMEA and North America at Robeco
Robeco has appointed Amr Albialy as Head of Institutional Sales for EMEA and North America, and Frank Groven as Head of Global Financial Institutions, a new role within Robeco’s Wholesale division. These two senior appointments within the sales and marketing team will be effective as of April 1, 2026. Both reflect the strength of internal talent and reinforce the company’s commitment to long-term commercial growth in key global markets.
Amr Albialy has served as interim Head of Institutional Sales for EMEA and North America since September 2025. Based in Dubai, he will continue to lead the sales business in the Middle East and Central Asia. He joined Robeco in 2011 as Head of Sales for the Middle East business and later became Regional Head of Institutional Sales for the Middle East and Central Asia. Over the past 15 years, he has been instrumental in expanding Robeco’s institutional presence in the region, delivering strong commercial performance, driving growth, and building long-standing strategic partnerships with clients.
Frank Groven has been appointed Head of Global Financial Institutions. He will be responsible for leading and expanding Robeco’s commercial relationships with global financial institutions, accelerating the development of the firm’s global wholesale distribution strategy. Groven previously served as Head of Wholesale for Belgium and Luxembourg (BeLux) and has been with Robeco for more than 18 years, initially joining as a Fixed Income Client Portfolio Manager. Since 2012, he has led commercial development in the BeLux region. To ensure continuity in BeLux, Erik van de Weele, currently Sales Manager BeLux, will assume Frank Groven’s responsibilities as interim head of the region.
Ivo Frielink, Global Head of Sales and Marketing at Robeco, stated that he is pleased “to strengthen our sales team with these senior roles filled by trusted colleagues from within our own organization. Both bring extensive experience, proven commercial strength, and a strong commitment to our clients, our colleagues, and our strategy. Their appointments ensure continuity in our leadership and reinforce our ability to execute long-term commercial objectives. I look forward to working together as we continue building on Robeco’s growth ambitions.”
Do you remember what you were doing exactly a year ago? Most likely, you were glued to your Bloomberg terminal or responding to calls and emails from your clients while the S&P 500 index plunged by as much as 18.7% from its peak in February. Yes, it has already been a year since ‘Liberation Day,’ and the image that has gone down in history is that of Donald Trump holding an enormous board listing each of the tariffs that the U.S. was going to apply to countries with which it maintained a large trade deficit—though not exclusively.
For the markets, this staging had another meaning: the return of volatility and uncertainty that continue today, now driven by geopolitics and oil. As Mauro Valle, head of fixed income at Generali AM (part of Generali Investments), points out when taking stock of this first year of a new normal in U.S. trade policy, the most relevant aspect is the changes in the market that have occurred since Liberation Day.
“President Trump’s protectionist policy had two consequences in the months following the announcement of the tariffs. The first was in the bond market, where the yield on the 10-year U.S. Treasury rose sharply. The second, which still largely persists, was a weaker dollar against currencies such as the euro. In fact, the dollar has depreciated in recent months due to other factors such as twin deficits, geopolitics, and the fragmentation of global capital flows. However, in these recent phases of acute risk aversion, it can still strengthen tactically, reflecting its liquidity function. It remains to be seen whether, after this crisis, the dollar will continue to be perceived as a safe-haven asset or not,” explains Valle.
Market Performance
The surprise has been that, despite the initial impact, the balance of the past year shows a different message: emerging markets defied expectations and led the gains in global stock markets one year after the announcement of the Liberation Day tariffs. According to data analyzed by Aberdeen Investments, which focuses on comparing percentage changes to assess how markets have performed across six major global markets between the market close on April 2, 2025, and one year later, on March 27, 2026, overall, most major indices experienced positive dynamics, with emerging markets at the forefront.
According to the asset manager, global stock markets recorded strong gains over the period, but the MSCI Emerging Markets index had the best performance, with a rise of 26%, followed by the FTSE 100, with 16%, and the FTSE World, with 14.1%. Meanwhile, the S&P 500 posted an increase of 9.6%, while the Dow Jones and the DAX recorded more modest gains of 4.4% and 3.1%, respectively.
“During the past year, investors have had to make sense of a great deal of noise and uncertainty, in addition to the human impact of global events. Although we would never want to draw major conclusions from a single year of market data, our analysis is interesting, and this period has served to remind us that headlines do not always tell the whole story. Even at a time when markets and geopolitics seem more entangled than ever, the figures can sometimes point to something different. Our main recommendation has been to encourage investors to diversify their equity allocations and, in that sense, it is encouraging to see that markets outside the United States are leading the way at a time of great uncertainty,” notes Ben Ritchie, Head of Developed Markets Equities at Aberdeen Investments, in light of these conclusions.
Economic Resilience
In the opinion of Jon Butcher, Senior U.S. Economist at Aberdeen, one year after “Liberation Day,” the U.S. economy has demonstrated resilience despite a clear cooling of the labor market. “Hiring slowed sharply in the months following the announcement of the tariffs, as companies assessed rising costs and policy uncertainty. Even so, growth held up better than expected, as households continued to spend and business investment accelerated. Tariffs did boost inflation, but the impact has been slower and smaller than the market initially feared,” says Butcher.
In addition, it is noteworthy that trade in 2025 did not contract, despite gloomy forecasts. “Both U.S. imports and Chinese exports reached new highs. Southeast Asia deepened its role in global manufacturing, India gained ground in selected sectors, and Brazil expanded commodity exports to China. Overall, trade grew faster than the global economy, while advanced economies and China reoriented away from geopolitically distant trading partners,” notes the McKinsey Global Institute in its latest report.
However, according to the think tank of McKinsey & Company in its report, tariffs triggered a reshaping of trade, with trade between the U.S. and China falling by around 30%. “The United States replaced approximately two-thirds of that gap with imports from other suppliers, while Chinese exporters of consumer goods, from electric cars to toys, cut prices by an average of 8% to find buyers in new markets. ASEAN prospered, increasing trade with both economies, but the European Union faced a double pressure: more Chinese imports and higher U.S. tariffs,” they add.
Lessons Learned
This episode leaves several lessons learned. First, according to the McKinsey Global Institute, changes in trade point to some lasting trends and, consequently, to the need for resilience in the face of shocks. “AI, the growth of emerging markets, and the evolution of China’s manufacturing approach are not temporary phenomena, nor is the growing role of geopolitics in reshaping trade, a shift that has been evident in the data for nearly a decade. Short-term developments also require a response. Tariff changes in 2025 were abrupt, and 2026 has already brought its own shocks. Companies need a long-term vision combined with agility,” they note.
Second, the Aberdeen economist warns that the political landscape has become even more uncertain: “The Supreme Court ruling on the IEEPA has cast doubt on the future of the tariff regime, and efforts to rebuild parts of it through other policy tools have left companies unsure about what the long-term rules of the game will be. For markets, the greatest risk is the growing perception among global investors that the United States is becoming a less reliable destination for capital. Concerns have increased about political volatility, central bank independence, and fiscal pressure. And although attention has shifted toward the Iran crisis and energy prices, tariffs remain a critical unresolved factor shaping how international capital perceives the United States.”
Finally, Capital Group reminds us that when markets are volatile, it is difficult to resist the temptation to do something, but they recommend staying the course. “What is the lesson of ‘Liberation Day’? Market downturns can be painful, but rather than trying to time when to enter or exit the market, the most sensible approach for investors is to stay the course. To weather market volatility, they should seek diversification across equities and bonds, while periodically assessing their risk tolerance in the face of elevated volatility. Although it may seem that this time is different, markets have proven resilient throughout history when faced with wars, pandemics, and other crises,” they insist.
Political swings recorded especially in Latin America so far this century have deepened the phenomenon of wealth migration, the outflow of capital, wealth, and individuals seeking greater stability and certainty for their fortunes, their families, and themselves.
This wealth migration, in turn, is driving a kind of “reconquest” of places and cities where wealthy migrants settle and create hubs of wealth and ultra-wealth, particularly in several of the most important cities in the United States and even in Europe.
“The phenomenon of wealth migration is not new, but it has intensified in recent years, not only in Mexico but across Latin America; with the rise of left-wing governments in the region, a certain degree of legal and financial uncertainty has emerged, intensifying the migration of wealth in search of security,” explains Juan Carlos Eguiarte, Country Manager of BAI Capital Financial in Mexico, a boutique real estate developer based in Florida, USA.
Which are these hubs of wealth and ultra-wealth driven by wealth migration? Here is a review of some of the most notable in recent years, which are not necessarily the only ones.
Key Biscayne, the “Spain of America”
Key Biscayne, a locality located southeast of Miami, Florida, is fully consolidated as one of the most exclusive and sought-after residential enclaves, home to wealthy families, celebrities, and senior executives, with a strong presence of Latin Americans and, above all, Spaniards—so much so that some affectionately call it “Key Spain.”
Real estate managers in that region know what wealthy migrants are looking for and offer it to their clients; the proposition to make them “land” there is simple: a “country club” lifestyle, maximum security, privacy, and natural beauty, all close to the vibrant urban life of Brickell and Miami Beach.
Key Biscayne, or “Key Spain,” offers luxury beachfront condominiums and private mansions, with prices reflecting high demand and limited land availability. In addition, the majority of the population in Miami-Dade County is Hispanic (69.1%), which facilitates the cultural integration of newcomers. But beyond that, the range of figures related to this hub of wealth and ultra-wealth in the United States linked to Spain and Latin America leaves no doubt about what wealth migration has generated in this location.
Key Biscayne is one of the communities with the highest concentration of foreign-born residents; the total Hispanic population represents 70.3% of inhabitants (approximately 10,400 people), and it is estimated that 58.1% of the current population was born outside the United States, according to 2025 figures from Data USA.
This region concentrates one of the highest per capita wealth densities in Florida. The median household income stands at $181,505 (more than double the U.S. national average); likewise, the average household income is $309,291 (this figure is higher due to the concentration of ultra-wealthy families).
Regarding wealth distribution, it is estimated that 48% of households in Key Biscayne have incomes above $200,000 per year, while per capita income is estimated at $106,219 (valued for 2024). All figures are from the U.S. Census Bureau, as of the end of 2025.
But the narrative of a “safe haven for capital” is supported by the fact that these groups not only live there, but also use the island to dollarize and protect their wealth. Data from the MIAMI Association of Realtors (2025–2026 reports) indicate that international buyers (led by Latin Americans) acquired 49% of all new luxury units in South Florida up to June 2025.
In addition, 68% of Latin American investors in the area pay for their properties entirely in cash, evidence of their very high liquidity and their intention to protect savings from instability in their countries of origin. And they are not there just for fashion or short stays; 91% of buyers in this region acquire properties in Miami and its islands for investment or second-home purposes.
But not only in Key Biscayne—Florida has other attractive locations for wealthy Latin Americans migrating in search of security and certainty.
Weston, Florida (“Westonzuela,” the South American hub)
Located in Broward County, near Fort Lauderdale, Weston is considered one of the cities with the highest quality of life in the United States and has become the epicenter of wealth migration for Venezuelans, Colombians, and Argentinians—essentially South America as a whole. Surprisingly, Weston is considered one of the most Hispanic cities in the country; 56.8% of its residents are Latino. The concentration of Venezuelans is so high that it is informally known as “Westonzuela” (Venezuela).
Weston attracts highly educated professionals and business owners; it is estimated that more than 53% of its residents are foreign-born, many of whom arrived with capital to invest in franchises and real estate. This small U.S. territory represents the success of the upper-middle and upper classes of South America, who seek a perfect suburban environment (A-rated schools, total security, and parks) without losing their Latin cultural connection.
Miami, a magnet for Latin American capital
Wealth migration has turned Miami into a kind of “magnet” for Latin American capital, with several additional examples. Doral is a hub where wealth migration translates directly into commercial and logistics activity, unlike Key Biscayne, which is more residential and leisure-oriented. Nearly 80% of its population is of Hispanic origin, and it has the highest concentration of Venezuelans per capita in the United States.
The flow of wealth into private banking offices in Miami (which serves Doral) grew by 10% annually from Mexico, Argentina, Chile, and Peru, seeking security amid political instability. Doral hosts more than 150 corporate headquarters and thousands of small and medium-sized enterprises founded by wealth migrants who have replicated their successful Latin American business models on U.S. soil.
It is a key logistics hub; its proximity to Miami International Airport allows Latin capital to control a large share of import/export trade with the region. Brickell (Miami) is, in turn, the financial district that has received a massive influx of “technolatinas” (startups valued in the millions) and investment bankers from the region.
Meanwhile, Coral Gables is considered the historic refuge of Central American and Spanish industrial families, characterized by Mediterranean architecture and one of the highest concentrations of consulates and multinational companies from Latin America.
One thing is clear: the wealth of Latin American and Spanish families does not arrive in the United States in a passive form (savings), but is highly active, accounting for 49% of new luxury developments in the region by mid-2025. But in the southern United States, and across the Atlantic, there are more examples of what capital can achieve when it has certainty and security.
The Woodlands (Texas), the refuge of the Mexican elite
Located north of Houston, The Woodlands has become a residential refuge and a luxury “oasis” for thousands of high-net-worth Mexican families, entrepreneurs, and politicians seeking security, certainty, and quality of life. But The Woodlands is not just a suburb; what wealthy and ultra-wealthy Latin Americans—especially Mexicans—have built here is an entire financial and security ecosystem designed for the transfer of large amounts of capital from Mexico (mainly Mexico City, Monterrey, and Puebla).
Unlike other migration waves, in this case the migration is purely wealth- and business-driven. It is estimated that more than 10,000 high- and ultra-high-net-worth Mexicans live in The Woodlands; the boom was driven by peaks of insecurity in Mexico (2006–2012 and 2018–2024), which turned The Woodlands into a “luxury extension” of neighborhoods such as San Pedro Garza García (Monterrey; the wealthiest municipality in Latin America) or Tecamachalco (Mexico City). In fact, the presence of institutions such as The John Cooper School or The Woodlands Prep is a decisive factor. For example, tuition can exceed $30,000 per year per child.
Real estate is the main vehicle for sheltering Mexican capital in Texas. Although the average price of homes ranges from $600,000 to $800,000, in areas where wealthy and ultra-wealthy Mexicans concentrate (such as Carlton Woods), mansions range from $2.5 million to as much as $15 million.
And if all the previous figures and data were not enough, one stands out as a clear indicator of the level of wealth generated in The Woodlands thanks to Latin American wealth migration: the cost of living in The Woodlands is 12% higher than the U.S. average, driven by the luxury consumption of its residents.
Salamanca District (Madrid), wealth migration that crosses oceans
Madrid, Spain, is a magnet for Americans and Latin Americans; in this city, for the past couple of years, one has heard the quip that the Salamanca district has become the “new Miami.” This is not just a perception—data supports it. The Luxury Homes 2025 report, prepared by Colliers, states that 55% of Madrid’s high-end supply is concentrated in the Salamanca district and that Madrid attracts international investors “especially from Latin America and the United States.” According to its conclusions, Madrid has climbed the rankings to become the second most attractive European city for real estate investment, surpassed only by London.
During 2024, approximately half of the homes purchased in the Community of Madrid were located in the capital, and 7% of these corresponded to foreign investors. This phenomenon has been particularly driven by buyers from Latin America and the United States, placing Madrid among the five most profitable markets for high-end residential investment. Likewise, Madrid has positioned itself as the fourth most attractive city globally for High Net Worth Individuals (HNWIs), leading the European ranking.
Specifically, the Salamanca district has been the clearest example of this trend. According to the Madrid Insight 2025/26 report, prepared by Knight Frank, the supply of newly built prime housing in its streets has fallen by nearly 20% between 2020 and 2025, helping to explain price pressure in an area where international demand is very strong.
“The Salamanca district continues to be the epicenter of the prime market, concentrating most high-price transactions. Within the district, neighborhoods such as Castellana and Recoletos stand out, with average prices currently ranging between €13,000/m² and €15,400/m². This is where the most exclusive properties are located, along with a top-tier commercial and gastronomic offering that reinforces its position as the most prestigious area of Madrid,” the report notes. For now, no increase in new prime housing developments is expected in this district due, according to Knight Frank, to local regulations and the city’s urban style.
In a week of significant geopolitical turmoil and market volatility, UBS has presented its Global Investment Returns Yearbook 2026, in which it places current investment challenges and debates into a long-term perspective, following a historical analysis of markets since 1900. Taking into account the current context, the main conclusion of this year’s edition is that global markets have undergone a profound transformation.
“At the beginning of the 20th century, the global stock market showed a relatively balanced distribution; today, by contrast, the United States dominates global market capitalization, representing 62% of the total equity market value. This reflects strong long-term equity returns and sustained equity issuance, even as the United States’ share of global GDP has declined from its mid-century peak,” the report notes.
A significant shift can also be observed in the sectors that have dominated global markets. Of the U.S. listed companies in 1900, nearly 80% of their value was concentrated in sectors that are now small or have disappeared, such as railroads, textiles, iron, coal, and steel. Meanwhile, 70% of today’s U.S. companies come from sectors that were small or nonexistent in 1900. By contrast, technology and healthcare were virtually absent from stock markets in 1900.
According to the report, investors often associate new technologies with “bubbles” and subsequent periods of lower returns. However, as was the case with railroads, despite being a declining sector over the study period (falling from 63% of the U.S. market in 1900 to less than 1% today), they actually delivered returns higher than both the U.S. stock market and their more recent technological competitors since 1900.
Other Lessons from the Market
Another clear conclusion from the report is that “equities are the best-performing liquid asset.” Specifically, equities have outperformed bonds, bills, and inflation since 1900: an initial investment of $1 grew to $124,854 in nominal terms by the end of 2025. Long-term bonds and Treasury bills delivered lower returns, although they outpaced inflation. Their respective index levels at the end of 2025 were $284 and $69, while the inflation index ended at $38.
“This outperformance is not unique to the United States. The Yearbook shows that equities were the best-performing asset class in all 21 countries with continuous investment histories covered in the Yearbook. Meanwhile, bonds outperformed bills in every country except Portugal. This pattern supports one of the enduring laws of finance, the risk-return trade-off, and the idea that taking risk should entail an expected reward,” explain UBS.
On the other hand, it is observed that developed markets have delivered better long-term results. In fact, since 1900, developed markets have recorded higher annual equity returns (8.5%) than emerging markets (6.9%). However, the report notes that “in more recent periods, emerging markets have outperformed developed ones, with an annual return of 10.9% between 1960 and 2025, compared with 9.6% for developed markets.”
Finally, the report highlights that inflation has a key impact on long-term returns. According to its analysis, although inflation in the United States has been relatively low compared with global standards—averaging 2.9% annually since 1900—its cumulative effect is highly significant: $1 in 1900 is equivalent to approximately $38 today. “Therefore, when comparing returns over time or across countries, the focus should be on real returns adjusted for inflation. In this regard, real equity returns have significantly outpaced inflation,” the report concludes.
