The global economy is going through a very turbulent time, really, with a lot of geopolitical uncertainty and a focus, a big focus tariffs. Somehow those tariffs have to be paid. That will happen either by increasing prices that the consumer will pay, which ultimately, will lead to lower demand and a potential recession, or it will have to be paid by the companies, either in the US or elsewhere, which means lower margins. And therefore, an effect on share prices as well. So for the second half of this year, when we will see this effect a lot more, that will probably be more negative than the first half of the year.

After years of outperforming, US markets started this year with a much higher valuation levels than the rest of the world. We believe, however, that specifically Europe is reflecting a scenario, from a valuation point of view, that is more negative than US. However, with the whole turmoil around tariffs, Europe's situation may actually be a lot better than expected.

Countries are working a lot closer together. We've seen very quickly a big investment announced into rearming Europe, but also in reconfirming the move towards a greener energy system in Europe. We've seen a bigger focus on potential deregulation, and we may see the end of the conflict in Ukraine as well. All of these are positive items for the European economy and given lower valuations that may continue or that may lead to continue the outperformance.

As a global megatrend investor, we look for themes that are less dependent on economic or even political cycles, and that can live through a few of these cycles. We continue to see great opportunities in health care, specifically related to health equipment, but also oncology and weight loss drugs, there are less tariffs exposed.

We also continue to see a lot of opportunities related to the build out of the AI infrastructure. And here we also see more and more opportunities related to cooling, to actually building the infrastructure, but also, building out the energy infrastructure.

Now, these are themes that are global in nature, but we also see, with this focus on rebuilding the global supply chains with the geopolitical issues, we see a bigger focus on building out local economies. Companies that help smaller companies to be active online, for instance, companies that help them with their taxes, with the reporting on tariffs, for instance, as well, and consultants in this space, we think also see great opportunities in the next decade to come.

When we construct our portfolios, specifically in these uncertain times, we keep a barbell approach. On the one hand, as a thematic manager, we're investing in longer term trends that will reshape our economy, and therefore, a bit more growth oriented. On the other hand, we really focus on more defensive characteristics as well in the portfolio, like investing in a lot more in health care, and utilities, and in high quality companies as well, with stronger balance sheets. So that should protect a bit more on the downside.