The Markets June 20, 2025

Asset Managers Predict Global Equities Will Be Best Short-Term Asset

Bank of America’s June Global Fund Manager Survey found that, over the next five years, a significant number of investors expect international stocks to be top performers.

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Asset managers and institutional investors surveyed by Bank of America suggested overwhelmingly that international stocks will be the best-performing asset over the next five years. The bank’s monthly Global Fund Survey, conducted from June 6 through 12, polled 190 investors who collectively manage $523 billion.

Approximately 54% of the responding investors reported they expect international stocks to be the best-performing asset class, while only 23% of those surveyed said U.S. stocks will be the best performers. Thirteen percent of respondents said gold would be the best-performing asset, while 3% said corporate bonds and 2% said government bonds.

Month over month, investors rotated the most into emerging markets, equities and the energy sector, while rotating the most out of the euro, the utilities sector and cash.

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According to the survey, investors in June were most overweight in their positioning to the eurozone, emerging markets and banks, while being most underweight U.S. equities, the dollar and the energy sector.

According to the survey, investors cited in the bank’s Fund Managers Survey are the most underweight they have been to the dollar in 20 years.

Relative to the average long-term position over the last 20 years, investors are most overweight the Euro, bonds and the utilities sector, while they are most underweight the U.S. dollar, bonds and utilities.

The survey also found that investor sentiment is recovering to pre-“liberation day” levels, as trade war and recession fears decline.

Despite a rebound in equity markets from lows following President Donald Trump’s tariff announcements in April, U.S. equities—driven by a technology- and artificial intelligence-fueled rally—are still underperforming their global counterparts. The S&P 500 has returned 1.95% year-to-date, while the STOXX Europe 600 and the iShares MSCI China Index have returned 1.94% and 17.83%, respectively, during the same period. The iShares MSCI Japan Index has returned 10.16%, and the iShares MSCI Emerging Markets index has returned 13.15%. Weaker U.S. equities have led investors to search globally for diversification.

“We do think there are going to be pockets of opportunities outside of the U.S. to diversify more geographically,” says Mao Dong, co-head of portfolio management and head of portfolio research at PGIM Multi-Asset Solutions.

Some of the opportunities identified by PGIM include European equities, specifically European defense companies, as well as European credit in the securitized market, along with investing in Japan.

“Valuations are very attractive for European equities; we can see pretty low expectations priced into these stocks, even after a significant rally this year,” says Kristina Hooper, chief market strategist at Man Group.

PGIM’s Dong suggests the market climate should prompt investors to consider opportunities globally.

“I’d say the U.S. will continue to be a dominant driver of returns globally, but it doesn’t mean that we can’t look to diversify away a bit from that and into these areas of opportunities,” Dong says.

Of the 190 survey respondents, 62 were institutional investors, 78 were mutual funds, 17 were hedge funds and 33 were other types of investors.

Data & Research June 20, 2025

Workers Don’t Expect to Succeed in Saving for Retirement

A new Transamerica report considers generational differences in retirement expectations.

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Most (80%) U.S. workers surveyed believe their generation has it “much harder” than their parents’ generation in achieving financial security, according to a new report published today by the nonprofit Transamerica Center for Retirement Studies in collaboration with the Transamerica Institute.

Almost seven out of 10 workers (68%) across generations feel they could work until retirement and still not save enough to meet their needs, according to “An Uncertain Future: Retirement Prospects of 4 Generations,” which examined the financial prospects of Generation Z (born from 1997 through 2012), Millennial (born 1981 through 1996), Generation X (born 1965 through 1980) and Baby Boomer (born 1946 through 1964) workers.

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Catherine Collinson, the Transamerica Institute’s CEO and president, said the most crucial ingredient for workers to achieve a financially secure retirement is access to meaningful employment that includes retirement benefits.

“Amid workforce transformations and the evolving retirement landscape, resilience is imperative,” Collinson said in a statement, adding that employees need to have the “know-how and resources to navigate an uncertain future.

Collinson noted that policymakers can help ensure that workers don’t get left behind amid the volatility of today’s workforce.

“Policymakers can also make it even easier and more affordable for employers to offer retirement benefits to their employees,” Collinson said.

Collinson added that policymakers should prioritize solving the funding issues of Social Security and Medicare because “workers are paying into these programs with expectation of receiving the benefits they have been promised.”

According to the survey, just 22% of workers feel they have “a lot” of working knowledge about personal finance. Although 58% of workers said they prefer to rely on outside experts to monitor and manage their retirement savings, only 35% reported currently using a professional financial adviser.

Gen Z and Millennials

Gen Z workers are starting their careers at a rocky time and have seen higher rates of unemployment in recent years than older workers. They are also facing prolonged labor market volatility, while they are often caretakers of older family members.

According to the report, almost six out of 10 Gen Z workers said they regularly feel exhausted and burned out—39% have more than one job and 59% have a side hustle.

These young workers are also worried about future employability, with more than half of survey respondents revealing their anxiety about artificial intelligence and robotics and whether these new tools will render their job skills obsolete.

The financial priorities of Gen Z respondents included paying off debt (55%), saving for a major life event (46%), making enough to cover basic living expenses (41%) and building emergency savings (40%).

According to the report, despite these competing priorities, 76% of Gen Z workers are saving for retirement through 401(k) or similar plans or outside the workplace. For those using a 401(k) or similar plan, they reported contributing 15% of their annual pay.

Collinson described Millennials as “feeling the crunch in their ‘sandwich years’ of juggling employment, raising children and caring for their aging parents” and said these responsibilities could lead to them procrastinating with their long-term retirement plans.

Almost six in 10 Millennial workers claimed they are still financially recovering from the pandemic and its aftermath, and 59% indicated that debt is hindering their ability to save for retirement, according to the report.

Regarding current financial priorities, 62% of Millennial respondents, when allowed to select multiple responses, ranked paying off debt as a top priority, 55% identified saving for retirement as a priority, and 46% said they are building their emergency savings funds.

Due to retirement still being two to three decades away, Collinson said Millennials still have time to save and grow their savings; she advised them to start creating financial plans “that reflect their goals and aspirations as well as their priorities and realities.”

Gen X and Baby Boomers

Generation X, whose members begin turning 60 this year, is behind on savings, and many of its members plan to work beyond the traditional retirement age to earn income and bridge saving gaps, according to Collinson.

The survey found that only 18% of Gen Xers are confident they will be fully able to retire comfortably, and just 23% “strongly agree” that they are building a large enough retirement nest egg.

For Baby Boomers, now in their early 60s to late 70s, almost 57% said they will retire at 70 or older or do not plan to retire at all, according to the survey. Baby Boomers also named declining health that requires long-term care and the extinction of or reduction of Social Security as their top retirement fear.

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