True Partner article: Does America First signal the end of American exceptionalism?

Entering 2025, belief in continued US exceptionalism was the norm, and was reflected in investor positioning and the premium attached to US assets. Coming into 2025, our outlook had highlighted this as a risk – but we know risks can take time to play out. When fundamentals shift, markets don’t always immediately follow. Data evidencing changes typically follows at a lag and investor flows are driven by a range of factors. But once change begins, it can happen fast.

After some ‘micro events’ last year, we are now starting to see more signs of change impacting price action. This is creating opportunities for our volatility strategies and is increasingly evident in the macro shifts across markets. We expect market volatility ahead and see the potential for a multi-year realignment of the world economy and the political order. This will bring risks but also opportunities. We expect volatility strategies to be a beneficiary, particularly those that thrive on higher volatility.

While we are not macro traders, understanding shifts in the market backdrop is important for contextualizing moves and anticipating change. We hope you find our thoughts useful.

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Does America First signal the end of American exceptionalism?>>