As 2025 properly kicks into gear, where are the opportunities for investors looking to grow their portfolios? Many investors have significant allocations towards tech in their portfolios relative to the broad market. Still, outside of tech, little consensus exists.
Indeed, market uncertainty may be the name of the game to start the year in major markets in North America and overseas. Investors may find greater peace of mind by choosing investment funds that rely on active management and fundamental research, as fundamental research provides the foundation for building high-conviction investment ideas.
High-conviction ideas may be more rewarding than investing in the entire market, which is how passive funds invest. Should the current uncertainty translate into a downturn later in the year and assumptions of continued, broad market growth be proven false, specific, research-driven, high-conviction ideas may still do well.
Actively-managed, high-conviction strategies, then, may deserve a closer look. Such funds can augment or supplement mostly passive core holdings that cover the broad market. Having strategies that can zig when the market zags – or even outperform modest market growth in good times – can boost an overall portfolio. With market uncertainty a key narrative to start 2025, high-conviction active funds may be a compelling option.