• They are not too much impressed about bad news like US Government shutdown, the stop-and-go with tariff and IA valuation concerns

• In the month of October developed large cap equities advanced 2.0%, global small caps gained 0.2% and emerging markets were up 4.2%.

• The deep trash rally observed since “liberation day» (stronger performance of fundamentally weaker companies) was most visible in Global Small Caps

• Artico Sustainable Emerging Market Fund is up 33.7% YTD, beating both standard and Paris-aligned benchmarks

• The current abundance of crash warnings and the AI-bubble should of course be taken seriously

• Equity market valuations are historically very high (see page 2)

• Markets are therefore exposed to significant correction risk

• Paradoxically, the public debate about the likelihood of an imminent crash provides for a healthy cushion as it keeps investors cautious and limits excessive leverage

• At least short-term, markets should continue their positive trend with support from strong company growth & profitability, lower interest rates and a less restrictive handling of the FED balance sheet 

• But even if a crash is not imminent, it cannot be considered as abandoned.

• The dangerous crashes occur when warnings are relatively scarce and complacency prevails

• In the meantime, investors are well advised to preserve their wealth for the longer term by investing in high quality real assets (real estate and equities)

• The long neglected emerging markets and global small caps seem to offer the best potential

• We recommend investing in robust investment strategies considering multiple factors and not overly dependent on a particular scenario.