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The seismic shifts shaping the investment landscape today, and the key trends that will continue to define investor thinking over the next ten years.
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Amid volatility, optimism surges for European markets: Natixis Investment Managers Strategists Survey

June 24, 2025
  • Seven in 10 strategists surveyed by Natixis IM think Europe will outperform the US in 2025.
  • More than half (56%) agree that tariff policies are creating the right conditions for European growth to ignite.
  • Strategists chose defence stocks (47%) as offering the greatest potential returns, given the positive narrative for European equities.

London, 24 June 2025 – In the aftermath of US President Donald Trump’s liberation day tariff policy, there has been a significant shift in sentiment towards Europe, with seven in 10 (71%) strategists across the Natixis Group and its affiliates saying that it will outperform the US in 2025.

The insights* of 34 market strategists, portfolio managers, research analysts and economists across Natixis Investment Managers affiliated group confirmed a bullishness for Europe, with over a third (38%) saying it will be the best performing market in H2 2025. That’s a huge jump from the same question in the survey last year, where just 3% of strategists picked Europe as the best performing market.

 

Conditions are tilted in Europe’s favour

While nearly nine in 10 (88%) of respondents agree that tariff threats are here to stay, more than half (56%) believe that tariff policies are creating the right conditions for European growth to ignite. When asked what they think would be the likelier headline at the end of the year, 74% of strategists selected ‘other markets outperform’, over 26% who chose ‘US stocks outperform’. In addition to this, three quarters (74%) thought the Euro is likely to strengthen by the end of 2025.

Recent geopolitical tensions and ongoing trade uncertainty has also driven Europe to look inwards and subsequently boost investment in European defence and infrastructure, supporting sectors like banks and defence stocks. Given this shift, nearly two thirds (59%) of strategists surveyed believe that defence stocks will benefit from increased spending globally, with this sentiment running highest with European strategists (77%) compared to the US (48%).

 

Volatility and inflation still a concern

European optimism aside, strategists remain wary of several threats to the market outlook over the next six months. The number of factors strategists’ class as headwinds – geopolitics (53%), employment (59%), consumer spending (79%) or a trade war (65%) – sharply outweigh those that are expected to be catalysts: central bank policy (62%) and corporate earnings (47%).

On the macroeconomic side, Natixis IM strategists continue to place more emphasis on politics than on economic policy, but they suggest that both sides will be impacted. Given the ongoing volatility, Treasury market turmoil emerged as the top risk, with 85% of strategists ranking it as a medium and high concern. Despite their traditional safe haven status, two thirds (62%) of European strategists said that US Treasury investments are no longer as safe as they once were, compared to just a quarter (24%) of US strategists saying the same.

Inflation was the second biggest risk on the minds of the strategists, with eight in 10 (79%) scoring it as medium and high. However, in terms of the specific impact of tariffs, three quarters (76%) of those surveyed think tariffs will only temporarily increase inflation, compared with a quarter (24%) who think that tariffs will drive persistent reinflation.

 

Volatility means opportunities are diverging

Ongoing market instability continues to be a concern. Over seven in 10 of the strategists surveyed (71%) believe that volatility will remain elevated in equity markets, and 68% feel the same way for bonds. Despite this, 71% of Natixis IM strategists revealed that they are actively finding opportunity in equity market volatility and 74% said the same for bonds markets. However, some will be choosing to ride it out (29% in equity markets and 26% in bond markets).

Looking at the best investment opportunities over the next six months, the positive narrative for European equities is reflected in the fact that nearly half (47%) of Natixis IM strategists selected defence stocks as offering the greatest potential returns. Likewise, the tech sector remains most popular for potential returns in US equities for the rest of the year, with 35% seeing the potential for a reignition of the tech industry in their H2 outlook.

 

Mabrouk Chetouane, Head of Global Market Strategy, Natixis Investment Managers, comments,

“In a year that has seen volatility taken to new levels with geopolitical uncertainty and questions over trade, market strategists are once again seeing genuine opportunity beyond the US.”

“Over the second half of the year, strategists will be looking to determine whether European growth will be sustained or if macroeconomic uncertainties and volatility will continue to weigh on markets. As heightened volatility persists and tariff threats unravel, investors need to be mindful of where the opportunities are arising, particularly in fixed income, defence and in the tech sector”

 

Active management continues to add value in fixed income

Strategists are looking to bonds for the second half of 2025, with 44% highlighting that they can be used to generate both return and income, but over two thirds (68%) point to active management as being key to adding value to bond portfolios.

In terms of the US market, investment grade was highlighted as being more popular among European strategists (54%) than their US counterparts (24%), which chimes with the feeling among US strategists that credit defaults are likely to rise (48%), for Europeans, just 15% felt this way.

The most popular choice in European fixed income was core government bonds (29%) and investment grade credit (29%). This divergence shows a clear appetite in the US for European long maturity, while in Europe the focus is on shorter duration with 69% selecting this compared with 57% in the US. Likewise, the greatest negative impacts from a trade war in H2 were seen to be in long maturity, core government bonds in the US (41%) and developed market high yield/floating rate debt in Europe (35%).

 

Cash isn’t always king

Over the past few years, higher interest rates have driven investors to turn to cash as a perceived safer alternative than equity and bond markets. However, Natixis IM strategists are quick to remind investors that cash isn’t quite all it is cracked up to be – especially as tariff threats put the US dollar under increasing pressure.

When asked for the top risks of holding cash as an investment, two fifths (41%) of the strategists surveyed pointed to the depreciation of currency as the top concern, with 38% of them seeing more attractive returns elsewhere. With inflation risk potentially impacting real returns, a third (35%) of Natixis IM strategists felt that cash rates are not good enough to meet long term goals.

Impacts of AI won’t all be positive

As Artificial Intelligence (AI) continues to pervade our everyday lives, Natixis IM strategists are considering its impact on the finance industry over the next 2-5 years. Many can see the benefits of AI, with 88% saying it will unlock new opportunities, 79% saying it will discover risks that were otherwise undetectable and 79% believing that it will accelerate day trading. Yet the majority are still wary, with 94% worried that AI will increase the potential for fraud and 71% believing that AI investment needs more time to pay off. In addition to this, nearly a quarter (21%) are worried that AI will take their job.

Another benefit of AI is that it may potentially increase ESG transparency, a sentiment felt by almost half (44%) of the strategists surveyed. When looking more broadly at sustainable investing over the next 2-5 years, four in ten (41%) say that impact investing will continue to expand and over half (56%) believe that the real sustainable investing leaders will rise to the top.

 

The full survey report can be found here: https://www.im.natixis.com/en-intl/insights/investor-sentiment/2025/strategist-outlook

 

Notes to Editors

About the Natixis Strategist Outlook

*The 2025 Natixis Strategist Outlook is based on responses from 34 experts including 24 representatives from 11 affiliated asset managers, 7 representatives from Natixis Investment Managers Solutions, and 3 representatives from Natixis Corporate & Investment Banking.

Michael J. Acton, CFA®
Managing Director and Head of Research & Strategy, North America
AEW Capital Management

Francois Collet
Deputy CIO
DNCA Investments

Pascal Gilbert
Bond Fund Manager
DNCA Investments

Carl Auffret, CFA®
Fund Manager, European Growth Equity
DNCA Investments

Eric Deram
Managing Partner, CEO
Flexstone Partners

Nitin Gupta
Managing Partner, Co-CIO
Flexstone Partners

Michael Buckius, CFA®
CEO, CIO, and Portfolio Manager
Gateway Investment Advisers

Adam Abbas
Portfolio Manager and Head of Fixed Income
Harris|Oakmark

Brian Horrigan, PhD, CFA®
Chief Economist
Loomis Sayles

James Grabovac, CFA®
Investment Strategist, Municipal Fixed Income Team
Loomis Sayles

Brian P. Kennedy
Portfolio Manager, Full Discretion Team
Loomis Sayles

Lynda L. Schweitzer, CFA®
Portfolio Manager, Co-Head of the Global Fixed Income Team
Loomis Sayles

Craig Burelle
Global Macro Strategist
Loomis Sayles

Elisabeth Colleran, CFA®
Portfolio Manager, Emerging Markets Debt Team
Loomis Sayles

Bo Zhuang
Global Macro Strategist
Loomis Sayles

Bertrand Rocher
Co-Head of Fixed Income
Mirova

Jens Peers, CFA®
CIO of Sustainable Equities
Mirova (US)

Hua Cheng
Portfolio Manager
Mirova (US)

Cyril Regnat
Head of Research Solutions
Natixis Corporate & Investment Banking

Christopher Hodge
Chief Economist, US
Natixis Corporate & Investment Banking

Jonathan Pingle
Economist, US
Natixis Corporate & Investment Banking

Jack Janasiewicz, CFA®
Portfolio Manager and Lead Portfolio Strategist
Natixis Investment Managers Solutions

Garrett Melson, CFA®
Portfolio Strategist
Natixis Investment Managers Solutions

Mark Cintolo, CFA®, CAIA
Portfolio Consultant
Natixis Investment Managers Solutions

Chris Sharpe, CFA®
Chief Investment Officer, Multi-Asset Portfolios
Natixis Investment Managers Solutions

Julien Dauchez
Head of Portfolio Consulting and Advisory
Natixis Investment Managers Solutions

Romain Aumond
Strategist
Natixis Investment Managers Solutions

Mabrouk Chetouane
Head of Global Market Strategy
Natixis Investment Managers Solutions

Patrick Artus
Senior Economic Advisor
Ossiam 

Philippe Berthelot
CIO, Credit
Ostrum Asset Management

Axel Botte
Global Strategist
Ostrum Asset Management

Chris D. Wallis, CFA®, CPA®
CEO, CIO
Vaughan Nelson Investment Management

Adam Rich
Vice President – Deputy CIO
Vaughan Nelson Investment Management

Daniel Wiechert
Client Portfolio Manager
WCM

CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

About the Natixis Center for Investor Insight

The Natixis Center for Investor Insight is a global research initiative focused on the critical issues shaping today’s investment landscape. The Center examines sentiment and behaviour, market outlooks and trends, and risk perceptions of institutional investors, financial professionals and individuals around the world. Our goal is to fuel a more substantive discussion of issues with a 360° view of markets and insightful analysis of investment trends.

 

About Natixis Investment Managers

Natixis Investment Managers’ multi-affiliate approach connects clients to the independent thinking and focused expertise of more than 15 active managers. Ranked among the world’s largest asset managers1 with more than $1.3 trillion assets under management2 (€1.2 trillion), Natixis Investment Managers specializes in high-conviction active investment strategies, insurance and pension solutions, and private assets, and delivers a diverse offering across asset classes, styles, and vehicles. The firm partners with clients in order to understand their unique needs and provide insights and investment solutions tailored to their long-term goals.

Headquartered in Paris and Boston, Natixis Investment Managers is part of Groupe BPCE, the second-largest banking group in France through the Banque Populaire and Caisse d’Epargne retail networks. Natixis Investment Managers’ affiliated investment management firms include AEW; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway Investment Advisers; Harris | Oakmark; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; Naxicap Partners; Ossiam; Ostrum Asset Management; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; Vega Investment Solutions and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings are available in all jurisdictions. For additional information, please visit Natixis Investment Managers’ website at im.natixis.com | LinkedIn: linkedin.com/company/natixis-investment-managers.

Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various US registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.

1 Survey respondents ranked by Investment & Pensions Europe/Top 500 Asset Managers 2024 ranked Natixis Investment Managers as the 19th largest asset manager in the world based on assets under management as of December 31, 2023.

2 Assets under management (AUM) of affiliated entities measured as of March 31, 2025, are $1,361.4 billion (€1,260.2 billion). AUM, as reported, may include notional assets, assets serviced, gross assets, assets of minority-owned affiliated entities and other types of nonregulatory AUM managed or serviced by firms affiliated with Natixis Investment Managers.

 3 A brand of DNCA Finance