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The TACO Effect Drives the Nasdaq 100 Roller Coaster

In the opinion of Mobeen Tahir, Director of Macroeconomic Research & Tactical Solutions at WisdomTree, this has been a year of acronyms in the financial markets.

“Everything started with MAGA: Make America Great Again. Occasionally, some have given it a satirical twist with MAGA: Make America Go Away, or MEGA: Make Europe Great Again. In fact, this year, the largest investment flows into European rather than U.S. assets have often accompanied this satirical view. In this list, of course, one must include DOGE: the Department of Government Efficiency. And, more recently, TACO,” notes Tahir.

According to him, this last term has been coined by Financial Times contributor Robert Armstrong, and it means Trump Always Chickens Out. And the acronym does not refer to Mexico, although that country does have some ties to it, but rather describes President Trump’s pattern of making bold political announcements, such as imposing tariffs or threatening the U.S. Federal Reserve, only to later backtrack and soften. For the WisdomTree expert, this has, of course, translated into significant market volatility.

“For Nasdaq 100 investors, TACO has meant a roller coaster, as can be seen in the chart below. For those inclined to trade tactically around these sharp market swings, there have been many opportunities to take positions in one direction or the other,” points out Tahir.

Nasdaq 100 Timeline
The chart highlights a selection of notable days when President Trump made hardline announcements (in red) and subsequently backtracked on those positions. “The typical reaction of the Nasdaq 100 has been negative in response to hardline announcements and positive after the subsequent reversals,” emphasizes Tahir. In his opinion, these are the most important moments of the year:

February 1: Trump signs an executive order imposing tariffs on imports from Mexico, Canada, and China. The Nasdaq 100 falls.

February 3: Trump announces a 30-day pause on his tariff threat against Mexico and Canada. The Nasdaq 100 reacts positively.

February 13: Trump announces plans for reciprocal tariffs. This is followed by a series of tariff threats against numerous countries. The Nasdaq plunges.

April 2: Liberation Day: reciprocal tariffs are announced. The Nasdaq 100 suffers a sharp drop.

April 9: A 90-day pause on reciprocal tariffs is announced. The Nasdaq experiences a strong rebound.

April 21: Trump threatens to fire Federal Reserve Chairman Jerome Powell.

April 22: Trump withdraws his threat to fire Jerome Powell.

May 12: The U.S. and China agree to a 90-day suspension of high retaliatory tariffs.

May 23: Trump threatens the European Union (EU) with 50% tariffs and threatens Apple with a 25% tariff on its products unless they are made in the U.S.

May 26: EU tariffs are delayed until July.

“One could argue that no one can predict what will come next regarding tariff announcements. But the real question is whether the TACO effect is still alive. Are there any interesting opportunities left for investors? One hypothesis is that the TACO effect may have ended because the markets have become immune to new and bold announcements from President Trump, knowing they will eventually be reversed or at least softened. While the opposite hypothesis is that political uncertainty is greater than ever,” notes Tahir.

His main conclusion is that the Nasdaq 100, often considered a proxy for the U.S. technology sector, has been greatly influenced by President Trump’s policy measures. “Regardless of whether investors support TACO trading or not, political uncertainty is likely to remain high. And if ultimately the focus shifts away from tariffs, perhaps corporate fundamentals such as earnings and economic data like inflation, labor market strength, and GDP will return to the forefront,” argues the expert.

For Tahir, perhaps then more traditional acronyms like FOMO (Fear of Missing Out), TINA (There Is No Alternative), and RINO (Recession in Name Only) will become relevant again. “In any case, something will continue to attract investors and will keep driving the Nasdaq 100, one way or another,” he concludes.

The Energy Transition: Driver of GSS Bond Issuance Also in Emerging Markets

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Green, social, sustainability, and sustainability-linked bonds (GSS) are a relatively young asset class, established with the first green bond transactions just over a decade ago. In emerging markets, the outlook for this asset class remains solid, with the energy transition being the driver that has pushed their issuance over the past decade.

According to the latest report prepared by IFC and Amundi, global GSS bond issuance reached an all-time high of more than $1 trillion in 2024 in gross terms, 3% more than the previous year. However, the share of this asset class over total fixed income issuances declined to 2.2% in 2024, compared to 2.5% the previous year. These figures remain well above the 0.6% levels of 2018.

The report data show that, in emerging markets, GSS bond sales fell by 14% year-on-year. “Much of this decline is explained by lower issuance from China, as local investors opted for conventional bonds in the domestic market,” it explains in its conclusions. Additionally, it indicates that another factor behind the market’s retreat was a 23% contraction in global fixed income issuance in emerging markets outside China, amid weaker economic growth in Asia and Europe.

Despite this, the conclusions state that GSS bond penetration exceeded 5% in emerging markets excluding China, a record and ahead of the rates observed in the Asian giant and in developed markets.

Regarding pricing, the so-called green premium or greenium (a yield discount for GSS bond issuers) was cut by more than half, down to an estimated 1.2 basis points in 2024 from 2.5 bps in 2023, according to Amundi calculations. “In emerging markets, meanwhile, the greenium effectively disappeared in 2024, as supply caught up with demand for this type of asset,” they note.

Growth Drivers
At the time of drafting this report (April 2025), the global economy is facing high levels of uncertainty, making short-term forecasts for GSS bond issuance in emerging markets difficult. That said, the underlying market factors are clear, such as a likely rebound in new issuance to refinance around $330 billion in bonds approaching maturity over the next three years.

On the other hand, there are three factors that will likely limit new GSS bond sales: weaker global economic growth, recent regulatory changes in Europe, and a declining investor sentiment regarding environmental, social, and governance issues.

According to the report, over the longer term, the outlook for GSS bonds in emerging markets remains solid. “It is likely that in the coming years annual investments in clean energy that provide greater efficiency and supply security will double. This growth will likely be supported by an increasingly competitive renewable energy sector and by the ambitious commitments of multilateral institutions,” the report explains.

Increasing Diversification
Global cumulative GSS bond issuance between 2018 and 2024 reached approximately $5.1 trillion. During this period, issuers from emerging markets contributed around $800 billion or 16%. According to the report, “a key driver behind this growth is the energy transition from carbon-based generation to alternative, cleaner energy forms or technologies.”

In fact, clean energy investments in emerging markets have surged more than 70% since 2018, and China alone has experienced a 170% increase. Investor appetite has also intensified notably: sustainable funds reached $3.6 trillion in assets under management in 2024—up from $1.4 trillion in 2018—and fixed income allocations within investment portfolios have increased to 22%. Additionally, multilateral institutions channeled $238 billion in climate financing to emerging markets between 2016 and 2022, according to the OECD.

“The GSS bond market is undergoing significant diversification. Although green bonds have long dominated emerging markets’ GSS bond issuance, there is a growing shift toward sustainability bonds. This trend is pronounced among multilateral institutions and, more broadly, among issuers outside China who seek the flexibility of sustainability bonds to finance both environmental and social projects,” explained Yerlan Syzdykov, Global Head of Emerging Markets at Amundi.

The report observes that, since the end of the COVID-19 pandemic, demand for healthcare financing has subsequently contracted, leading to a stabilization in social bond sales. “This asset class represented 6% of total GSS bond issuance in emerging markets between 2022 and 2024. In contrast, sustainability-linked bonds experienced a sharp decline. This may reflect increasing criticism of their design flaws and weak penalty structures that do not effectively incentivize issuers to meet the sustainability targets set out in the terms of the assets,” the document concludes.

After an 11-Year Hiatus, BlackRock Brazil Will Launch New ETFs

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BlackRock Brazil announced the launch of two new ETFs at a meeting with journalists. This move comes after an 11-year hiatus without new products. Under the leadership of Bruno Barino, who assumed the role of CEO in October of last year, the manager announced new strategies for Brazil and new products.

According to Barino, they are based on a global trend. “We began to complement our network. Today we have BOVA11, the most liquid ETF in Brazil. It is a historic success, with a volume of 11 billion reais (around $2 billion). Now we see an evolution in the ETF market and we want to support this transition in Brazil,” he stated.

One of the ETFs, EWBZ11, focuses on equal weighting: “If there are, for example, one hundred stocks, each will have 1%. This already exists in relation to the S&P and now also in relation to the Ibovespa,” he indicated.

The product will replicate the Bovespa BR+ Equal Weight B3 Index, which includes the Ibovespa assets and BDRs of Brazilian companies listed abroad, with an equal weighting among issuers. “This provides greater balance among the companies in the portfolio and dilutes the weighting of companies with the highest market value,” the manager stated.

“Some clients do not want the same concentration of companies in the exchange. In this case, we observe a different treatment of the index,” he commented about the new product.

The other ETF, CAPE11, has a CAP5 strategy, which limits the maximum weighting of any stock to 5% of the index. This means that, even if a company has a high market value, its share in the index will not exceed this limit.

The fund replicates the Bovespa BR+ 5% Cap B3 Index, which also includes Ibovespa stocks and BDRs of Brazilian companies listed internationally, but with a maximum limit of 5% per issuer. “We take the surplus from the largest companies and distribute it at the end,” he said.

Barino commented that the new products have had “much more acceptance than expected. We conducted a roadshow with assets and pension funds, and the acceptance is much greater than I imagined. I have seen that Brazilian investors are maturing regarding this product. Now we are evolving.”

Advisory, Family Offices, and MFOs
BlackRock Brazil has also established a new advisory area for project development. Barino cites as an example the manager’s participation in Saudi Arabia’s Vision 2030 plan, whose objective is to develop the local economy. There, the manager works with the Public Investment Fund on a $5 billion investment platform to develop capital markets.

“How do you design a project? How do you make it attractive? (…) This is a trend I am bringing to Brazil and I hope to see results soon,” he stated.

In addition, according to Barino, BlackRock has also been working with single-family and multi-family offices.

“Before, we focused only on products, but now we focus on understanding each one’s operating model. There are players with a level of sophistication equivalent to a bank treasury department. Others have only two or three people. Therefore, we are close to selling solutions,” he noted regarding this.

This Is “The 21-Day Route” for Vector, Intercam, and CI Banco

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The Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) issued orders identifying CI Banco, Intercam, and Vector Casa de Bolsa as a “primary money laundering concern in connection with illicit opioid trafficking.” As a consequence, they are prohibited from carrying out certain fund transfers in the United States, measures that will take effect within 21 days counted from last June 25. The final deadline expires on July 15, counted as calendar days.

According to what is described in the FinCEN orders, the designated institutions are prohibited from conducting fund transfers to or from CIBanco, Intercam, or Vector, or to or from any convertible virtual currency account or address, managed by or on their behalf, in U.S. dollar accounts in the United States.

However, the measure goes further because by linking the names of the Mexican financial institutions to criminal groups—in this case drug cartels recently classified as “terrorist groups” under U.S. law—the prohibitions also extend to all clients of the institutions, whether individuals or legal entities, as well as any national or foreign entity.

“It is without a doubt a complex situation and a major risk for the institutions once the 21-day period expires, unless during this period there are negotiations and actions by those involved as well as by the Mexican authorities to avoid the application of the sanctions as of next July 15,” said in a radio interview Michel Levien, an attorney specializing in anti-corruption, anti-money laundering, and transparency.

According to Levien, this situation “is serious due to the high integration of the financial systems of both countries; one could not conceive of the activity of a Mexican bank or brokerage house being unable to make transfers to the U.S. market.”

In the short term, those who have accounts with these three institutions are not affected except if they are based in the United States or carry out transactions through any U.S. bank or financial institution, according to the expert.

But in the medium term, clients of these institutions will have to be very attentive to the legal proceedings (lawsuits) that may be filed both in Mexico and the United States, because those proceedings can impose very serious sanctions including fines, forfeiture (seizing of obtained profits), suspension of activities, and even dissolution (closure).

“A problem is that these institutions, especially CI Banco, have many clients in the export sector; if it were prevented from making transfers to the U.S. market, there would be severe repercussions for its operations,” commented Maribel Vázquez, founding partner of GMC360, a Mexican consulting and auditing firm with over a decade of experience in the financial sector, regulatory compliance, and money laundering prevention.

“In the case of CI Banco and Intercam, their beginnings as currency exchange houses allowed them to evolve over time to become banks with clients in the country’s foreign trade sector, which is a large part of their core business. Therefore, the prohibitions of the U.S. Department of the Treasury, if they are ultimately enforced, directly impact the companies’ business,” she explained.

“Once the deadline arrives, and even already, U.S. banks cannot do any transactions with these three Mexican institutions, except, for the moment, if those banks have offices in the United States,” explained Salvador Mejía, partner at Asimetrics.

“But then another problem will arise, something called ‘de-risking’; in my recent conversations with anti-money laundering directors of banks in the U.S., all were emphatic that anything that smells, looks like, sounds like, or is linked to these three institutions—they will not want any relationships. In other words, all types of relationships with them are over. This of course can also affect the individuals and legal entities doing business with Vector, CI Banco, and Intercam. This is very serious,” he stated.

“I find it very serious; the coming days will be essential for the future of the banks and the brokerage house involved, and also for the country’s financial system.”

Experts agreed that the 21-day route is what follows and is high risk because, although these are the first managerial interventions by the Mexican authorities that do not stem from solvency risks, the future of the institutions is indeed at stake due to the potential sanctions to which they could be subject in the U.S. market.

There would indeed be an impact on the institutions’ operations in the United States, whether or not they have subsidiaries in that country; their activity there would be practically eliminated, and no client could receive or transfer money from accounts related to these three Mexican financial institutions.

Distilled Intelligence 3.0 Connects Investors with top Startups

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Investors will gain exclusive access to high-potential early-stage startups and targeted co-investment opportunities at Distilled Intelligence 3.0 (DI 3.0) from October 13-16, 2025, in an invitation-only summit hosted by Frtify Ventures and Loudon County’s Department of Economic Development.

At the heart of this event is a $1 million SAFE note prize available to one of the approximately 100 handpicked seed to Series A companies pitching across sectors like cybersecurity, health, defense tech, energy and future-of-work.

DI 3.0 is designed to go past traditional pitch competition. In addition to curated one-on-one meetings, attendees will engage in panels, breakout sessions and networking with family offices, VCs and seasoned startup operators. All these in a setting optimized for relationship-building rather than transactional interactions.

Founders accepted to the program receive complimentary lodging and meals to ensure access to top-tier investors without financial burden. Applications are open through September 15, 2025, at DistilledIntelligence.com and are reviewed on a rolling basis.

This year, DI 3.0 also welcomes experienced startup operators who can offer strategic insight and potential collaboration opportunities to both investors and founders.

“Distilled Intelligence 3.0 is more than just another event – it’s a meticulously curated gathering designed to nurture the next generation of transformative businesses,” said Jonathon Perrelli, Managing Partner at Fortify Ventures.

Attendees will enjoy a full agenda that blends structured programming with informal networking, including keynote sessions, industry roundtables, and activities such as tennis, yoga, and fireside chats. The full speaker lineup and selected startups will be announced later this year.

For media or registration inquiries, contact kari@redironpr.com. Investors and partners seeking invitations can email hello@fortify.vc.

1 in 4 U.S. Workers is Functionally Unemployed

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Nearly 25% of American workers are now considered functionally unemployed, according to the May True Rate of Unemployment (TRU) report from the Ludwig Institute for Shared Economic Prosperity. The rate rose to 24.3%, up from 24.2% in April, marking a continued start on full-time, living-wage employment.

However, the official Bureau of Labor Statistics unemployment rate remained flat at 4.2%, underscoring the growing gap between traditional job metrics and actual workforce conditions. LISEP’s TRU metric includes the unemployed, underemployed, and those working full-time in poverty-wage positions.

“Wages aren’t keeping up with the rising cost of living, and the shrinking availability of living-wage jobs is compounding the strain. The consequences for working families are becoming increasingly severe,” said LISEP Chair Gene Ludwig.

The report noted mixed outcomes across demographics. Black and Hispanic workers saw modest improvements, with TRU falling to 26% and 27%, respectively. However, white workers experienced an increase to 23.6% and women saw their TRU jump 1.3 points to 29.9%, widening the gender gap once again to 10 percentage points. In contrast, the rate for men dropped 19.3%

The TRU has remained above 24% since February, a level not seen consistently since the pandemic’s economic fallout. Analysts say this trend signals growing inequality in the labor market and deeper structural issues affecting low-and middle-income workers.

“Identifying trends is key in determining the direction of the economy, and unfortunately, for low and middle-income workers, the trends are not encouraging,” said Ludwig.

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.