2025 outlook: Fixed income, US smaller companies and renewables

• We’re bullish on bonds – although investors should manage their expectations on rate cuts.
• President Elect Donald Trump could be positive for US smaller companies.
• Both infrastructure and renewable energy offer investors potential for income and growth.
• Gold will hold its value.
  

Emma Wall, head of platform investments, Hargreaves Lansdown:

“Expect volatility to reign in 2025 and for equities and bonds to be jumpy over the next 12 months. Nothing new there, markets and yields have bounced about in 2024, sensitive to macroeconomic and political shocks. But, while it can be difficult to manage the emotional rollercoaster of a volatile investment market, it also creates opportunities for nimble investors. Heading into the new year, there are three investments we see as the most compelling. However, as always with investing, these should be part of a portfolio that is well diversified across regions and asset classes.

Bonds

We’re bullish on bonds – although investors should manage their expectations on rate cuts. This is a higher for longer era. Both the Federal Reserve central bank in the US and the Bank of England in the UK have warned that cuts