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Delivery Doubts Push Consumers Back in-Store

Nearly two-thirds of Americans say they’d be more likely to buy high-value items online if secure delivery rooms were available in their buildings, according to a national survey conducted by The Harris Poll for logistics technology firm Position Imaging.

Among apartment and condo residents, who face the greatest delivery challenges, that percentage rises to 68%

As confidence in home delivery falters, especially for large purchases, nearly 70% of Americans now prefer to buy big-ticket items in-store rather than risk receiving them via unsafe delivery. Especially in places like multifamily housing, this trend underscores growing consumer demand for reliable last-mile solutions.

“As online shopping accelerates, trust in secure, scalable, and future-proof delivery solutions is increasingly shaping where and how consumers choose to buy,” said Ned Hill, Founder and CEO of Position Imaging.

These delivery concerns are reshaping purchasing timelines. Sixty-six percent of U.S. consumers say they are advancing purchases due to fears of tariff-driven price increases, while over one-third are shopping early to avoid potential stock shortages.

The behavioral shift is led by younger demographics. 87% of those aged 18-34 and 83% of those aged 35-44 report expediting purchases this year, compared to more than double the rate among those over 65.

Position Image’s Smart Package Room, an AI-powered parcel management system deployed in residential and commercial buildings, is created to meet this demand by offering secure, automated delivery and pickup.

For stakeholders in real estate, logistics and e-commerce, the data signals rising urgency for scalable infrastructure that restores delivery trust and supports evolving consumer behavior.

Memory of a Quarter Century: How Long It Has Taken Markets to Recover From Each Financial Crisis

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Creand Wealth Management, an entity specialized in private banking, addresses how financial markets have behaved after those periods of crisis, with the aim of analyzing how long they took to recover and observing the impact of those crises on the development of stock markets in the medium and long term.

The Dot-Com Bubble (1999–2000)
The dot-com bubble crisis refers to the period between the end of the 20th century and the beginning of the 21st, where companies whose business was based on technological advances experienced very rapid growth, which led to problems derived from the lack of knowledge about those new business models and a miscalculation regarding expectations of profit generation.

This crisis gave rise to the massive bankruptcy of tech companies and a reduction of jobs related to the sector, with a drop of more than 82% in the Nasdaq-100, the U.S. stock index that includes the 100 most important technology companies, during the period between March 27, 2000, and October 9, 2002. The index took 15 years to recover, although the growth experienced since 2015 has allowed it to increase its stock market value by 405% over the last decade.

The Global Financial Crisis (2007–2008)
This was the most serious financial crisis since the Great Depression of 1929, caused by a situation where excess credit and laxity in granting mortgages to people with low credit profiles (subprime) converged. Mortgage debts multiplied, causing a wave of foreclosures that ultimately pushed systemic entities into bankruptcy, such as the case of Lehman Brothers in September 2008. This situation led to a global crisis of confidence and a freeze in credit granted to both companies and individuals.

This crisis caused a sustained drop in financial markets globally, which lasted until 2010. If we take the MSCI World index as a reference, a broad global equity index that represents the performance of mid- and large-cap equity, markets took almost six years (February 2013) to reach the highs prior to the crisis.

The European Sovereign Debt Crisis and the Euro Crisis (2010–2012)
The increase in public and private debt levels worldwide, to stimulate growth and rescue entities after the great financial crisis, fostered a breeding ground that led to a sovereign debt crisis, a banking system crisis, and an economic system crisis in the European Union. This scenario triggered a wave of downgrades in the credit ratings of several European states’ government debt.

The impact was especially significant in countries like Spain, Italy, Portugal, and Greece, whose chronic deficit levels worsened due to a lack of control. The loss of confidence in these markets caused a sell-off of debt from countries with higher exposure to risk and an increase in the risk premium that led to a generalized loss of confidence.

If we take as a reference the evolution of the main indices of Spain and Italy, the two most important economies in the eurozone that suffered the impact of the debt crisis, we observe that in Spain, the Ibex has not returned to the levels of 11,900 points until January 2025, despite already coming from a downward trend due to the 2007 crisis, when it had reached its all-time highs, standing at 15,945 points in November 2007.

In the case of Italy, its benchmark index, the FTSE MIB, suffered a 72% drop from May 18, 2007, to March 9, 2009. After a slight recovery during that year, it took almost nine years to recover the levels reached in September 2009 (23,900), in April 2018.

The Market Drop Due to the COVID-19 Pandemic (2020)
The global pandemic caused by COVID-19 is another example of a black swan for markets. It unexpectedly affected the entire planet at the beginning of 2020, and caused lockdowns and closures never before seen worldwide. Taking the MSCI World as a reference, in just two months, markets fell 34%, from February to March 2020, as a result of nervousness and the paralysis of economic activity. In fact, two of the five largest stock market crashes in history occurred almost consecutively during the first days of the health crisis, on 03/12/20 (-9.9%) and 03/16/20 (-9.9%).

Despite that nearly 20% drop between January and March 2020, the recovery was also very fast. Markets had already recovered pre-pandemic levels by December of that same year and, from that moment on, stock markets have experienced robust growth, driven by the momentum of large technology companies.

The Impact of Global Inflation and Restrictive Monetary Policies (2021–2025)
After the COVID-19 pandemic, the global economy faced a scenario of rising energy prices, never-before-seen fiscal stimulus, and a supply chain crisis that caused a significant increase in global inflation. The rise in prices, along with restrictive monetary policies by major central banks, posed some challenges for the economy: minimizing the rising cost of credit and the drop in investment and consumption, market volatility, and the risk of economic stagnation.

Nonetheless, the impact was limited in the markets. According to the MSCI World, from the historical high reached in December 2021 up to that moment—when markets were riding a bullish trend driven by the progressive return to post-COVID-19 normalcy—stock markets took 26 months to recover (February 2024), and from that moment, they have experienced sustained growth.

The Return of Donald Trump to the U.S. Presidency (2025)
The growth potential of the markets in recent years, mainly under the momentum of technology companies, has been halted following the arrival of Donald Trump to the presidency of the U.S., in his second term. His aggressive tariff policy has caused declines greater than 10% in financial markets globally. The MSCI World fell 11.29% and recovered the levels prior to the announcement (3,668 points) on May 1, 2025. In particular, markets suffered major declines after the so-called Liberation Day, last April 2, when Trump announced his massive tariff package. However, it is still too early to see the short- and medium-term impact and how the stock markets will recover.

Patience, Discipline, and Diversification
In a financial environment that is in constant change and evolution, black swans—those unpredictable surprises that can drastically alter markets—will always be present. From economic crises to global pandemics, events that seem distant and unlikely can happen at any moment and affect the stability of assets and challenge traditional strategies. However, history teaches a fundamental lesson: patience and discipline, along with proper diversification, are the keys to surviving and thriving in times of uncertainty.

Remaining invested during sharp downturns, far from being a risky strategy, is actually one of the most prudent decisions an investor can make. Juan Litrán, analyst at Creand Family Office, explains that “market corrections, no matter how painful they may seem in the short term, have historically been the breeding ground for long-term opportunities. Black swans, though challenging, also bring with them a market recalibration that, for those who stay true to their diversified investment strategies, offers significant returns once the volatility is overcome.”

On the other hand, diversification, far from being just a technique to mitigate risks, becomes a lifeline in the face of global uncertainty. According to Litrán, “by spreading risk across different asset classes, sectors, and geographies, investors not only protect their portfolio against the unexpected, but also position themselves to capture growth when the market recovers.”

Thus, what today seems like a black swan, with the passage of time, can be perceived as an opportunity. “That is why it is essential that investors do not get carried away by emotions or panic that distance them from their long-term goal. Investing requires vision, discipline, and above all, a well-diversified strategy that withstands the test of time, even in the most turbulent moments,” adds Litrán.

After Three Decades of Stagnation, Nuclear Energy Generation Is Booming

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After decades of stagnation, global nuclear energy supply is expected to increase significantly in the coming years, according to a report by Brian Lee and Carly Davenport, analysts at Goldman Sachs Research.

“By 2040, our analysts forecast that global nuclear generation capacity will increase from 378 gigawatts (GW) to 575 GW, representing a rise in nuclear energy’s share of the global electricity mix from approximately 9% to 12%,” the note states.

The projected increase in generation capacity coincides with a rise in global support for nuclear energy and a resurgence in investment in nuclear generation. In May, President Donald Trump signed executive orders to accelerate the adoption of nuclear energy in the U.S., aiming to expand nuclear power from the current 100 GW to 400 GW by 2050. Meanwhile, China plans to build 150 nuclear reactors over the next 15 years, targeting 200 GW of nuclear generation capacity by 2035. At the latest COP29 meeting, held in November 2024, 31 countries committed to advancing toward the goal of tripling global nuclear generation by 2050.

Global investment in nuclear energy generation is also increasing: investment grew at a compound annual rate of 14% between 2020 and 2024, following nearly five years without growth in spending.

“This has occurred following improved political support globally, underscored by rising energy demand and lower-emission alternatives in a world that is retiring coal plants at a much faster pace than building new ones,” Lee and Davenport write in the team’s report.

Nuclear reactors require uranium as fuel. According to Goldman Sachs, “as more plants come online and the lifespan of existing reactors is extended, the team expects a rise in uranium demand in the coming years, which will likely drive up the price of the metal.”

In total, the team forecasts a uranium supply deficit of approximately 17,500 tonnes by 2030. “We expect this deficit to increase to approximately 100,000 tonnes by 2045, as new reactors come online,” Lee and Davenport write.

The American Continent Led Wealth Creation in 2024

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The global wealth landscape continued to evolve in a year marked by shifts in the economic environment. According to the 2025 edition of the UBS Global Wealth Report, global wealth increased by 4.6% in a dynamic rebound after registering 4.2% growth in 2023, thus maintaining an upward trend.

The report’s findings indicate that the pace of growth was quite uneven, with North America contributing the most, while the American continent as a whole accounted for the majority of the increase: over 11%. “The stability of the U.S. dollar and the dynamism of financial markets contributed decisively to this growth,” the document notes.

In contrast, the Asia-Pacific (APAC) region and the one comprising Europe, the Middle East, and Africa (EMEA) lagged behind, with growth rates below 3% and 0.5%, respectively.

Key Trends
Focusing on geographic trends, the report notes that adults in North America were, on average, the wealthiest in 2024 (USD 593,347), followed by those in Oceania (USD 496,696) and Western Europe (USD 287,688), while Eastern Europe recorded the fastest growth in average wealth per adult, with an increase of over 12%.

However, measured in U.S. dollars and in real terms, more than half of the 56 markets in the sample not only did not contribute to global growth last year, but actually saw a decline in average wealth per adult. Despite this, Switzerland once again topped the list of average wealth per adult among individual markets, followed by the United States, the Hong Kong Special Administrative Region, and Luxembourg. Notably, Denmark, South Korea, Sweden, Ireland, Poland, and Croatia recorded the largest increases in average wealth, all with double-digit growth rates (in local currency).

Another striking finding from the report is that the number of dollar millionaires increased by 1.2% in 2024, representing a rise of more than 684,000 people compared to the previous year. Once again, the United States stood out by adding more than 379,000 new millionaires—over 1,000 per day. “The United States, mainland China, and France recorded the highest number of dollar millionaires, and the U.S. alone accounted for nearly 40% of the global total,” the findings state.

According to UBS, over the past 25 years there has been a notable and steady increase in wealth worldwide, both in total and across each of the major regions. In fact, total wealth has grown at a compound annual growth rate of 3.4% since 2000. “In the current decade, the wealth bracket below USD 10,000 is no longer the largest segment in the sample, as it has been surpassed by the next bracket, between USD 10,000 and USD 100,000,” they note.

Over the next five years, the report’s forecasts for average wealth per adult point to continued growth, led by the United States, as well as China and its area of influence (Greater China), Latin America, and Oceania.

From the Classic 60/40 Portfolio to the 40/30/30 Strategy: It Is the Moment for Alternatives

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For decades, the famous 60/40 portfolio, which allocates investments with 60% in stocks and 40% in bonds, was considered the standard model of diversification for conservative and moderate investors. But times have changed, and with them, the fundamentals that supported this strategy. A recent report published by Candriam questions the current effectiveness of this traditional model in the face of an economic landscape marked by volatile inflation, persistently high interest rates, and growing geopolitical tensions. In addition, it highlights the relevance of including alternative assets in portfolios.

Although stocks performed well in 2023 and 2024, driven by moderating inflation, future expectations are more modest. Interest rates continue to constrain equity valuations, while bonds continue to offer reduced returns and less protective capacity. The consequence: the breakdown of the balance that made the 60/40 model a reliable option to face adverse scenarios.

The study underscores that despite its strong historical performance over the past two and a half decades, the risk profile of the 60/40 has generated serious concerns. A nominally allocated portfolio in this proportion has shown a correlation close to 1 with the equity market, which in practice makes it a reflection of stock behavior. This means that in times of crisis, such as in 2008 or during the market collapse due to the pandemic in 2020, the 60/40 did not offer the protection many expected. For most investors, losses exceeding 30% are not acceptable, which raises the urgency to review the model and seek additional, more resilient sources of diversification.

The document, signed by Johann Mauchand, Pieter-Jan Inghelbrecht, and Steeve Brument, proposes a new formula to restore diversification and improve the risk-return profile of portfolios: the 40/30/30 strategy, which includes alternative assets as a third key component.

Increasing Portfolio Resilience: The 40/30/30 Approach
For Candriam, the answer lies in diversifying beyond traditional instruments. The proposal: to replace 30% of a 60/40 portfolio with alternative assets, using the Credit Suisse Hedge Fund Index as a reference. The result, according to the historical analysis, is compelling: higher returns, lower volatility, and better downside protection.

The new 40/30/30 portfolio, composed of 40% stocks, 30% bonds, and 30% alternatives, showed a 40% improvement in its Sharpe ratio, a metric that assesses risk-adjusted returns. Even using a passive index-based allocation, the benefits were significant.

Charting a New Direction
Candriam’s study warns about a crucial aspect that many investors overlook: not all alternative assets are the same, nor do they behave in the same way under different market conditions.

Using broad indices as a reference is useful as a starting point, but it also highlights a structural challenge: the universe of hedge funds and alternative strategies is immensely diverse, and their performance can vary significantly. The difference between properly selecting which type of alternative to include in a portfolio—or not—can have a decisive impact on the final outcome.

To address this problem, Candriam proposes a functional allocation framework designed to go beyond the simple grouping of assets under the “alternatives” label. Instead of treating these strategies as a homogeneous block, the firm suggests classifying them according to the functional role they play within a portfolio, dividing them into three broad categories: downside protection, generation of uncorrelated returns, or capture of upside potential.

This segmentation enables the construction of more resilient and efficient portfolios, adjusting them dynamically according to the economic environment. The key, according to Candriam, lies in an active and centralized allocation that responds to market changes in real time.

Implications for Asset Allocation
Candriam concludes that adopting this more flexible and functional approach can improve results in three essential dimensions: higher returns, lower risk, and better-controlled drawdowns. To achieve this, it recommends two simple but powerful actions: selecting alternative assets that fulfill one of the three defined roles and dynamically rebalancing the portfolio according to the macroeconomic context.

The conclusion of the report is clear: the 60/40 model is not dead, but it does need a thorough revision. In an increasingly uncertain environment, the strategic inclusion of alternative assets could be the key to building truly diversified portfolios prepared for the future.

Vanguard Reduces Fees on Its Range of Fixed Income ETFs Available to European Investors

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Vanguard has announced the reduction of fees on seven of its fixed income exchange-traded funds (ETFs) available to European investors, effective July 1, 2025. According to the firm, this measure reinforces Vanguard’s commitment to making fixed income investing more accessible, especially in a context where bonds are playing an increasingly important role in investors’ portfolios.

“The bond market is currently twice the size of the equity market, but it remains opaque and costly. Investors deserve something better. At Vanguard, we believe that in investing, you get what you don’t pay for. Costs matter. By reducing fees, we are helping to make fixed income more accessible and transparent. We estimate that these changes will represent approximately 3.5 million dollars in annual savings for investors. We have already expanded, and will continue to expand, our fixed income offering throughout this year,” said Jon Cleborne, Head of Vanguard for Europe.

The following ETFs will have their fees reduced starting July 1.

Vanguard Positions Itself in Fixed Income
Vanguard is the second largest asset manager in the world, with 10.5 trillion dollars in assets under management globally as of May 31, 2025. Its fixed income group, led by Sara Devereux, manages more than 2.47 trillion dollars globally, combining deep expertise to deliver precise index tracking, prudent risk management, and competitive performance.

Earlier this year, Vanguard expanded its range of European fixed income products with the launch of the Vanguard EUR Eurozone Government 1–3 Year Bond UCITS ETF, Vanguard EUR Corporate 1–3 Year Bond UCITS ETF, Vanguard Global Government Bond UCITS ETF, and Vanguard U.K. Short-Term Gilt Index Fund.

Following these changes, the weighted average asset fee of Vanguard’s European range of index and actively managed fixed income funds will be 0.11%. Currently, Vanguard offers 355 fixed income index products in Europe, and on average, its range of fixed income ETFs is the most cost-effective in the European market. Across its entire product offering in Europe, the weighted average asset fee will now be 0.14%.

Lisandro Chanlatte and Carlos Asilis Create AC Global Investment Partners; Target Institutions and UHNW Families

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Lisandro Chanlatte and Carlos Asilis, professionals with long experience in the financial market, became independent to create AC Global Investment Partners, an independent investment advisory and management platform prepared to “act as a trusted steward of the generational wealth” of institutions and ultra-high-net-worth families.

Both aim to be “long-term partners of sophisticated investors,” in their own words. They have set a goal of reaching 500 million dollars in AUMs within three years, working with between 20 and 40 families, both in the onshore and offshore markets.

In the founding documents of AC Global—reviewed by Funds Society—you can read the services the firm will offer, and also the way it will operate. Both partners will provide a comprehensive, customized solution for professional wealth oversight. It was designed exclusively to serve ultra-high-net-worth families and institutional investors with more than 25 million dollars in liquid assets under advisory.

Based in New York (Chanlatte) and Miami (Asilis), they promise to mediate between their clients and multiple financial providers, ensuring optimal asset management. Their platform offers four exclusive investment strategies: Global Fixed Income, Global Balanced, Global Absolute Return, and Global Thematic, all based on a macroeconomic and multi-asset framework that prioritizes alpha generation while protecting against drawdowns and supporting long-term growth.

Above all, what will distinguish AC Global, Chanlatte assured Funds Society, is its independent perspective, which will avoid conflicts of interest in investment recommendations and biases in decision-making. The new firm will allow its clients to continue working with their preferred banks and providers, but “now optimized by professional oversight.”

For Chanlatte, “this will be more than a new company: it is a reinvented model to deliver institutional-quality investment management with the alignment, transparency, personalized service, and independence our clients deserve.”

The Chief Investment Officer of AC Global, Carlos Asilis, has managed institutional capital for pension funds, endowments, foundations, insurance companies, family offices, and U.S. private banking clients. “His multi-cycle track record reinforces our ability to deliver consistent, risk-adjusted returns in both stable market regimes and periods of stress,” states the firm’s founding document.

Different but Complementary Backgrounds
The backgrounds of Chanlatte and Asilis are different but highly complementary, adding value to the firm. The former has broad experience, acquired mainly at Citi Private Bank, where he led investment advisory teams and strategies for institutional and ultra-high-net-worth clients. Meanwhile, the latter specializes in macro investing and portfolio risk management.

Lisandro Chanlatte is an executive in the private wealth management industry with extensive experience in investment strategy, portfolio construction, and comprehensive asset allocation solutions for ultra-high-net-worth individuals and institutions. At Citi, he was part of the leadership team of Global Private Bank, the area of Ida Liu, who resigned from her position at the end of last January.

With a professional track record of over two decades, his experience in global asset management and business strategy focused on leading the Investment Advisory department of Citi Private Bank in North America.

Previously, as Chief Investment Officer for Latin America at Citi, he managed a significant investment business and led a large team across multiple financial centers. His responsibilities included developing investment strategies and overseeing about 50 billion dollars in assets. Almost his entire professional career was linked to the U.S. bank. Before joining Citi, he worked as an equity research associate, also in New York, at J.P. Morgan, and was Managing Director & Investment Officer at BAP Capital, a real estate fund.

Chanlatte holds a Bachelor’s degree in Business Administration from Loyola University New Orleans (summa cum laude) and an MBA from Harvard Business School. He is also a Chartered Alternative Investment Analyst (CAIA) and holds FINRA Series 7, 24, 31, 63, and 65 licenses.

Carlos Asilis is an expert with 30 years of experience in global macroeconomic investing, economic analysis, and portfolio construction. Before co-founding AC Global, he was a portfolio manager at Graham Capital Management and co-founder and Chief Investment Officer at Glovista Investments, where he managed multi-asset and emerging market strategies with peak assets exceeding 1.1 billion dollars.

Earlier, he was Chief Investment Strategist at JPMorgan Chase, where he advised institutional clients worldwide and defined global asset allocation views. At the start of his career, he worked at some of the world’s most respected macro and proprietary trading platforms: VegaPlus Capital Partners, Santander Global Proprietary Trading, and Credit Suisse First Boston. These experiences deepened his understanding of market cycles and risk management, skills that remain central to his investment philosophy as Chief Investment Officer of AC Global Investment Partners.

Asilis also worked as a research economist at the International Monetary Fund (IMF), where he was involved in economic surveillance programs and structural reform in China and Russia. He holds a Ph.D. in Economics from the University of Chicago and a Bachelor’s degree in Economics and Finance from the Wharton School at the University of Pennsylvania. His market approach is based on data and global insight.

Companies Risk Suffering More Acute Supply Chain Failures in 2025

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In this 2025, organizations face an increased risk of suffering acute supply chain failures as a result of growing global geopolitical tensions and protectionist trade strategies, according to a new report published by Marsh.

According to its analysis, in addition to the risks associated with the reconfiguration of global trade and geopolitics, the report concludes that changing market and policy dynamics present both challenges and opportunities for organizations in the energy transition, especially regarding carbon credit markets (CCMs) and debt-for-nature swaps (DFNSs).

One of the findings highlighted in the report is that organizations trading with connector countries to circumvent existing or anticipated trade controls, or that have suppliers doing so, may be more exposed to disruptions induced by trade policies in the months and years ahead. “As a result of deteriorating relations between major trading partners, governments may also impose trade barriers on goods coming from connector countries, especially those that include components from the originally targeted country, which could create significant volatility in the global supply chain,” it notes.

What Can Companies Do?

To improve their resilience to supply chain shocks arising from the current geopolitical landscape, the report recommends that organizations review China’s commitment to its trade strategy and the underlying objectives of U.S. trade policy, and consider to what extent the current connector model will persist in relation to their business models.

The Political Risk Report states that changing market and policy dynamics present both challenges and opportunities in the energy transition, echoing the findings of the World Economic Forum Global Risks Report 2025, in which environmental risks dominate the 10-year horizon.

While global CCMs made significant progress at COP29 and DFNSs have also gained momentum, challenges remain in both areas regarding political risk and the possibility of default. Additionally, the growing climate compliance obligations, especially those stemming from new European Union regulations, may present operational risk challenges for organizations.

“Increased risks around the economy, geopolitics, and climate change are creating an incredibly complex operating environment, unlike anything organizations have experienced in decades. Those who build their ability to understand, assess, and mitigate the risks facing their operations are likely to be better positioned to identify opportunities where others only see ambiguity and to gain a competitive advantage in these uncertain times,” said Robert Perry, Global Head of Political Risk and Structured Credit at Marsh Specialty, in light of these findings.

The Dollar in Latin American Portfolios: Safe Haven or Burden?

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Latin American investors are battle-hardened. We come from a history marked by political and economic crises (the tequila effect in the 1990s, hyperinflation, the “corralito” and defaults in Argentina, the impeachment of Dilma Rousseff in Brazil, Chavismo in Venezuela, the banking crisis and dollarization in Ecuador…) that have led us to keep part of our savings abroad. Traditionally, Switzerland and the United States have been the preferred destinations for those seeking to protect their wealth from the volatility that has characterized many regional markets.

The Dollar and Stability: A Concept Deeply Rooted in the Collective Psyche

Regardless of where offshore accounts are held, the total asset composition of regional investors has followed an undeniable pattern: local currency and local assets in the domestic market, and hard currency in offshore accounts. The dollar has long been the safe-haven asset against decades of instability, and in the Latin psyche, it is the continent’s collective currency.

The dollar is the de facto currency for offshore investments, both for individuals and institutions. The rationale is clear: it is the hard currency tied to the world’s largest and most liquid market, both in equities and in debt. Additionally, during risk-off episodes, it has offered a refuge and low correlation with local assets.

According to data from J.P. Morgan, the dollar accounts for nearly 90% of global currency transactions, 66% of international debt, 58% of global reserves, and 48% of payments processed through SWIFT (Society for Worldwide Interbank Financial Telecommunication)[1].

The Problem: This Thesis May Be Tested in the Coming Years

The dollar’s overvaluation against a broad basket of developed and emerging currencies has been widely noted in recent years. However, under the shield of American exceptionalism, a correction seemed unlikely—until it wasn’t.

Currencies Can Defy Gravity for Long Periods

It is hard to pinpoint a single factor behind the correction now underway. Valuations matter, and by many expert accounts, the dollar was at levels of overvaluation not seen since 1985.

Combine this with an expansive fiscal policy, a growing deficit unlikely to be resolved, rising trade tensions, and declining confidence in U.S. institutional strength, and the market’s response becomes logical: “To lend to the United States—in other words, to finance its deficit—I now require a higher risk premium, and the same applies to the returns I expect from companies affected by tariffs.”

This same risk premium raises the risk-free rate used to discount future cash flows and value all financial assets. However, this premium is not global—it is specific to the United States due to its internal challenges. As a result, it should disproportionately affect U.S. debt and equity markets, as well as the dollar.

Additionally, the impact on sentiment, uncertainty, and the erosion of confidence in U.S. fiscal and trade policy may reduce investment inflows to the U.S., redirecting capital toward stronger economies with better growth potential.

What Does This Mean for the Latin American Investor?

The first takeaway is that, in the medium term, the dollar may no longer serve as the region’s safe haven. One can easily imagine a market correction—not as extreme as 2008—where local currency assets post negative returns while the dollar itself also weakens. In this scenario, portfolios heavily invested in offshore dollar assets could suffer a double loss: losses in local markets amplified by losses in dollar-denominated investments. The same would apply to the total net worth (domestic and offshore) of private investors.

For institutions in countries with high domestic interest rates—such as Brazil or Mexico—the situation is even more complex. These portfolios are often expected to deliver returns comparable to local rates, which leads to an overweight in equities, high-yield credit, and generally riskier assets. Historically, the thinking has been that a rising dollar would cushion declines in risk assets and local holdings.

It is important to note that a correction in the dollar toward long-term fair value does not negate its role as a safe haven in extreme risk-off scenarios. However, when the imbalances stem from the U.S. itself and uncertainty surrounds its policy direction, a drop from historically elevated levels seems reasonable.

No Magic Solutions, Only Sound Investment and Portfolio Principles

A logical response to today’s uncertainty is to seek diversification into other hard currencies and markets. At the individual level, several advisors and asset managers note that currently less than 5% of Latin American investors’ wealth is allocated outside the dollar. Institutions—central banks excluded—also show very low levels of currency diversification.

A good starting point for diversifying the assets of individuals and institutions in our region would be to reference the weight of the dollar and U.S. assets in global equity and bond indices.

The MSCI World is a global equity index representing large- and mid-cap companies in 23 developed countries (it does not include emerging markets). It is capitalization-weighted, with the United States accounting for around 70% as of the end of May 2025. Because it excludes emerging markets, this index complements portfolios already exposed to Latam.

In fixed income, the Bloomberg Global Aggregate Bond index is widely regarded as a reference for a diversified, high-quality debt portfolio. In it, the U.S. represents nearly 40%—meaning the investor has 60% exposure outside of the dollar and U.S. bond markets, with allocations to countries such as Japan, Germany, and Canada, among others.

Beginning to think in terms of global indices rather than the S&P 500 would be a first step toward building more resilient portfolios for the Latin American investor. In a recent note, J.P. Morgan Private Bank stated: “Given that dollar risks appear to be skewed to the downside, we believe investors (particularly those whose wealth is denominated in another currency) should review their currency allocations as part of a broader, goal-based plan.”

I couldn’t agree more. It’s time to review portfolios and consider the range of possible scenarios for the coming years—a task that many advisors and portfolio managers in the region have likely already begun.

[1] Source: J.P. Morgan Private Bank, www.privatebank.jpmorgan.com/latam/es/onsights

Balanz Positions Itself in Uruguay as a Full Investment House, Expanding Its Reach and Services

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Following approval by the Central Bank of Uruguay and the Montevideo Stock Exchange, Balanz announced in a statement the completion of the acquisition of 100% of the shares of Corporación de Inversiones Uruguay Sociedad de Bolsa S.A. (CIU). With this, the firm founded in Argentina marks a new milestone in 2025, the year in which it reached $10 billion in assets under management.

“This acquisition marks a milestone in Balanz’s expansion strategy in the country, establishing itself as a Full Investment House offering a comprehensive range of financial services,” the statement added.

With this integration, its operational capacity is expanded by incorporating the licenses of Securities Broker, Portfolio Manager, and Stockbroker. This structure enables the firm to provide comprehensive solutions in financial advisory, investment management, and brokerage operations, both locally and internationally.

Additionally, the firm has intensified its expansion in Uruguay through the enlargement of its offices and the hiring of local talent.

“It is a great pleasure and joy to share this news, which undoubtedly reflects the teamwork we’ve been doing in Uruguay,” said Juan José Varela, CEO of Balanz Uruguay.

Balanz is a company that, in recent years, has made significant investments in technology: “This focus has been key to democratizing access to investments and offering financial solutions tailored to each client’s needs. In Uruguay, its consolidation as a Full Investment House is expected to drive the full evolution of the investment market, through improvements in infrastructure and adaptability to user needs,” the company stated.

Balanz has over 20 years of experience in the capital markets, with a presence in Argentina, the United States, the United Kingdom, Panama, and Uruguay. It serves more than 1,000,000 clients and recently achieved a historic milestone by surpassing $10 billion in assets under management (AUM).