Many Western investors fail to grasp the full potential of China’s economic resurgence, warns Alexandre Drabowicz, CIO at Indosuez Wealth Management. With a series of strategic measures in place to stabilize its economy, China is poised for a significant rebound in 2025 – driven primarily by a resurgence in consumer demand.
«There is significant catch-up potential in China, which should also become visible in stock markets,» Alexandre Drabowicz, Chief Investment Officer (CIO) at French private bank Indosuez Wealth Management, says in an interview with finews.tv. Some investment trends from last year will continue to hold strong in 2025. However, Drabowicz also sees significant potential in highly undervalued asset classes.
While much of what surrounds US President Donald Trump now may be pure spectacle, it is clear that he will remain focused on his «America First» agenda, Drabowicz adds. This, he argues, calls for a reaction from Europe. However, Drabowicz doubts whether the EU is currently capable of delivering one.
Key Themes for 2025
«With stock-picking, it is still possible to achieve solid returns, though overall sentiment remains subdued. Europe is a bit like a tourist destination – people like to visit, but they don’t stay,» the French investment specialist remarks.
This year, Drabowicz focuses on several key themes, including private markets – investments in companies that are (still) privately held and not publicly traded. Indosuez Wealth Management has been investing in this asset class for 20 years and has built up extensive expertise in the field.
Enormous Value in Gold
One of the strongest opportunities Drabowicz sees for 2025 is gold, which serves as a hedge against uncertainty. He also highlights the extraordinary appreciation of the precious metal over extended periods: In 1946, $10,000 could buy either a house or 400 ounces of gold.
«Today, 400 ounces are worth more than one million dollars,» Indosuez's investment specialist says, illustrating gold’s enduring significance as an asset class. Given sustained demand from central banks, further price increases in the precious metal are likely.
Magnificent Seven and US Sector Rotation
Last but not least, Drabowicz sees further upside potential in the so-called Magnificent Seven – the world’s seven largest publicly traded companies: Apple, Microsoft, Alphabet (Google), Amazon, Nvidia, Meta (Facebook), and Tesla. These companies recorded massive paper gains last year.
However, from a risk perspective, Drabowicz believes the time has come to diversify and allocate more investments to small- and mid-cap US companies. «In the long run, sector rotation will take place, bringing other industries back into favor among investors,» he concludes.
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